Evaluating 3 Basic Components of a TDF

Plan Sponsors are charged with an ongoing fiduciary responsibility to evaluate and select investment options that are appropriate for their retirement plan participants. When looking under the hood and evaluating TDFs, fiduciaries need to consider these three basic components:

  1. Glide path – the change in allocations over time, which determines the TDF’s overall investment strategy
  2. Asset allocation – the mix of asset classes and underlying investments used in the TDF
  3. Fees and expenses – includes general TDF fees as well as underlying investment expenses