SEC’s Target Date Fund Rulemaking: Comment Period Reopened to Address Recommendations Concerning Risk-Based Illustration of Glide Path

April 24, 2014

The U.S. Securities and Exchange Commission (SEC or Commission) on April 3, 2014, reopened the period for public comment on its proposed target date fund (TDF) rulemaking. The Commission’s proposed TDF rulemaking (Proposal) would require certain TDF marketing materials to include, among other things, a table, chart or graph depicting the fund’s asset allocation over time – i.e., an illustration of the fund’s “asset allocation glide path." In connection with the Proposal, the Investor Advisory Committee (IAC), a body established by the Dodd-Frank Wall Street Reform and Consumer Protection Act, provided a number of recommendations to the Commission concerning the illustration of glide paths intended to provide enhanced information to investors regarding TDFs and reduce the potential for investors to be confused or misled by such investments. This Dechert OnPoint summarizes the IAC’s recommendations concerning the risk-based illustration of glide paths and discusses the Commission’s request for comments.

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