FILED ELECTRONICALLY

Office of Regulations and Interpretations 

Employee Benefits Security Administration 

U.S. Department of Labor 

200 Constitution Avenue, NW, Room N-5655 

Washington, DC 20210 

Re: Proposed Regulations on Target Date Fund Disclosure 

Dear Sir or Madam: 

We are writing on behalf of the Committee of Annuity Insurers (the “Committee”) to 

comment on proposed disclosure regulations published by the Department of Labor (the 

“Department”) in the Federal Register on November 30, 2010. The Committee is a coalition of 

life insurance companies formed in 1982 to participate in the development of federal policy with 

respect to annuities. The Committee’s current 32 member companies represent more than 80% of 

the annuity business in the United States and are among the largest issuers of annuity contracts in 

connection with employer-sponsored retirement plans. A list of the Committee’s member 

companies is attached. 

The proposed disclosure regulations would modify the requirements applicable to 

qualified default investment alternatives (“QDIAs”) and fill in a section of the recently finalized 

participant-level fee disclosure regulations that was reserved for target date fund disclosures. 

Broadly speaking, both sets of proposed changes are meant to ensure that plan fiduciaries 

provide participants and beneficiaries who have the ability to direct the investment of their plan 

accounts with sufficient information about plan investment alternatives to make informed 

decisions about plan participation and the management of their individual accounts. To this end, 

the proposed regulations stipulate that a plan fiduciary must provide participants with 

enumerated investment-related information about the plan’s QDIA and any target date fund 

investment alternatives. 

The sole issue addressed in this comment letter is the extent to which the required 

disclosures are appropriate for QDIAs that are structured as an “investment management service” 

under DOL Regulation 2550.404c-5(e)(4)(iii) – a permissible type of QDIA. As the Department 

is aware, it is not uncommon for a plan to offer access to an investment management service, 
Committee of Annuity Insurers 

2 

sometimes referred to as a managed account option. A typical managed account option 

constructs an asset allocation for an electing participant out of the plan’s existing menu of 

designated investment alternatives. The investment manager of the managed account will have 

discretionary authority to rebalance the investment allocations, for example, based on changes in 

the capital markets as well as the age of the participant. There is ordinarily a fee for use of the 

service and the participant will also pay shareholder and investment expenses for each of the 

investment alternatives that are utilized. Consistent with the requirements of the final QDIA 

regulations, the investment manager must be one described in section 3(38) of ERISA. 

A managed account option may be different from other QDIAs, including target date 

funds, because it is tailored to the plan and its participant population. Like target date funds, 

managed account options that are used as QDIAs take into account the age of the electing 

participant. However, the investment strategy utilized by the managed account’s investment 

manager may take into account the demographics and behavioral characteristics of plan 

participants as a whole. Depending on the particular managed account option, the service may 

even take into account participant-unique factors other than the participant’s age, for example, 

the existence of other assets, such as other employer-provided retirement plans. 

The proposed QDIA regulations would require, among others, disclosure of the QDIA’s 

issuer, principal investment strategies and principal risks, historical performance data, and fee 

and expense information, including the QDIA’s annual operating expenses. These requirements 

are clearly designed for investment funds, such as mutual funds, rather than for investment 

services, and the Committee believes that it is appropriate for the Department to develop 

disclosure rules that are tailored to managed account services. 

A managed account option does not have an issuer; it has an investment manager. A 

managed account option’s principal investment strategies and principal risks are highly 

dependent on the factors taken into account under the program. For example, the investment 

strategies may be very different if the managed account option takes into account the existence 

of a defined benefit plan maintained by the employer. Similarly, it is far from clear how an 

investment provider should construct historic performance data for a typical managed account 

option since the performance may be unique to each plan and may even be unique to each 

participant. It is not practical to provide the same types of historic performance data that are 

routinely made available for investment funds if this information is unique for every plan and 

even every participant. 

To be clear, the Committee has no objection to disclosure requirements that are tailored 

to QDIAs that are investment management services. Our concern is merely that the current 

proposed rules are not suitable to these services. Thus, the Committee strongly recommends that 

the Department develop disclosure requirements that are appropriately tailored to managed 

accounts. It should not be overly onerous to develop a disclosure regime that reflects the nature 

of the managed account service and, in fact, plan fiduciaries routinely provide information about 

managed accounts to plan participants. These existing disclosures should serve as a template for 

any new disclosure requirements. 

January 6, 2011

The Committee of Annuity Insurers

The Willard Office Building

Suite 1200

1455 Pennsylvania Ave., NW

Washington, D.C. 20004

AEGON Group of Companies, Cedar Rapids, IA

Allstate Financial, Northbrook, IL

AmerUs Annuity Group Co., Topeka, KS

AXA Equitable Life Insurance Company, New York, NY

Commonwealth Annuity and Life Insurance Co.

(a Goldman Sachs Company), Southborough, MA

CNO Financial Group, Carmel, IN

Fidelity Investments Life Insurance Company, Boston, MA

Genworth Financial, Richmond, VA

Great American Life Insurance Co., Cincinnati, OH

Guardian Insurance & Annuity Co., Inc, New York, NY

Hartford Life Insurance Company, Hartford, CT

ING North America Insurance Corporation, Atlanta, GA

Jackson National Life Insurance Company, Lansing, MI

John Hancock Life Insurance Company, Boston, MA

Life Insurance Company of the Southwest, Dallas, TX

Lincoln Financial Group, Fort Wayne, IN

MassMutual Financial Group, Springfield, MA

Metropolitan Life Insurance Company, New York, NY

Nationwide Life Insurance Companies, Columbus, OH

New York Life Insurance Company, New York, NY

Northwestern Mutual Life Insurance Company, Milwaukee, WI

Ohio National Financial Services, Cincinnati, OH

Pacific Life Insurance Company, Newport Beach, CA

Phoenix Life Insurance Company, Hartford, CT

Protective Life Insurance Company, Birmingham, AL

Prudential Insurance Company of America, Newark, NJ

RiverSource Life Insurance Company (an

Ameriprise Financial Company), Minneapolis, MN

SunAmerica Financial Group, Los Angeles, CA

Sun Life of Canada, Wellesley Hills, MA

Symetra Financial, Bellevue, WA

TIAA-CREF, New York, NY

USAA Life Insurance Company, San Antonio, TX

The Committee of Annuity Insurers was formed in 1982 to participate in the development of 

federal tax and securities law policies with respect to annuities. The member companies of the 

Committee represent more than 80% of the annuity business in the United States.