January 14, 2011 Transmitted via electronic mail to: e-ORI@dol.gov

Ms. Phyllis C. Borzi

Assistant Secretary, U.S. Department of Labor

Office of Regulations and Interpretations, 

Employee Benefits Security Administration

200 Constitution Avenue, NW, Room N-5655

Washington, DC 20210

Re: Target Date Amendments (RIN 1210–AB3)

Dear Ms. Borzi:

The Mutual Fund Directors Forum (“the Forum”)1 appreciates the opportunity to 

comment on the proposed rulemaking by the Department of Labor (“DOL”) concerning 

“Target Date Disclosure.”2

The Forum, an independent, non-profit organization for investment company 

independent directors, is dedicated to improving mutual fund governance by promoting 

the development of concerned and well-informed independent directors. Through 

continuing education and other services, the Forum provides its members with 

opportunities to share ideas, experiences, and information concerning critical issues 

facing investment company independent directors today and serves as an independent 

vehicle through which Forum members can express their views on matters of concern.

Comments

In light of the fact that target date funds are available through 401(k) retirement plans, 

and some plans use these funds as the default investment for plan participants who have 

not selected their investments under the plan, the DOL has recently focused on enhancing 

disclosure requirements for target date retirement funds.

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 1 The Forum’s current membership includes over 600 independent directors, representing 84 independent 

director groups. Each member group selects a representative to serve on the Forum’s Steering 

Committee. This comment letter has been reviewed by the Steering Committee and approved by the 

Forum’s Board of Directors, although it does not necessarily represent the views of all members in every 

respect.

 The proposed amendments are 

intended to help clarify the shifting asset allocation within particular target date funds and

improve the information provided when these funds are offered as investment options in

2 Proposed Rulemaking: Target Date Disclosure, Rel. No. 10-1658-NAT (November 16, 2010) [75 FR 

73987 (November 30, 2010)] (“Release”).

3 See, DOL and SEC Investor Bulletin, Target Date Retirement Funds, May 6, 2010, avail. at: 

http://www.dol.gov/ebsa/pdf/TDFInvestorBulletin.pdf. 
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retirement plans. The proposals are thus intended to advance the goal of better aligning 

the expectations of the millions of Americans who use target date funds to invest for 

retirement with the investment assumptions underlying the funds’ asset allocation mixes 

over time, or “glide paths.”4

As proposed, the new disclosure rules proposed by the DOL would require that

retirement plan fiduciaries provide certain information to plan participants regarding a 

target date fund offered as an investment alternative in a participant-directed individual 

account retirement plan. In particular, the amendments would require plan fiduciaries to 

disclose to participants the target date fund’s asset allocation at the target date, how the 

asset allocation will change over time, and the point in time in which the investment will 

reach its most conservative asset allocation, including a graphical representation 

illustrating the changes in asset allocation over time.

5 Further, the proposals would

require that disclosures to plan participants include a statement to the effect that a target 

date retirement fund should not be selected based solely on age or retirement date, that it 

is not a guaranteed investment, and that the stated asset allocations may be subject to 

change. 

Fund independent directors have a special and unique interest in accurate and 

comprehensible fund disclosure. First, and most obviously, a fund’s directors sign the 

registration statement, including the prospectus, and thus must be satisfied that the 

prospectus disclosure complies with the relevant statutory requirements. But second, and 

even more importantly, as the one group that represents only fund shareholders, 

independent directors have a substantial interest in ensuring that prospectuses and other 

required disclosure documents clearly and effectively communicate to fund investors the 

information that those investors need and want to know about their investment options. 

Therefore, the Forum supports the DOL’s overall effort to provide investors in target date 

funds through retirement plans with more transparent and understandable information 

about these investment options. 

Disclosure Enhancements

In our view, clarity and directness are the keys to effective disclosure. As the 

Release notes,6

 4 Release at 73991.

improvements can be made in the information that is disclosed to 

participants and beneficiaries concerning their plan investments in target date funds. For 

a target date fund, key information for investors includes a description of the fund’s glide 

path (including, significantly, what the allocation will be at the fund’s target date and at 

its landing date). Analyzing the differences between possible investments requires 

5 Presumably, as in the SEC Proposal (see footnote 8), target date funds that have passed their target date 

would be required to disclose the fund’s actual asset allocation as of the most recent calendar quarter. 

6 Release at 75 FR 73988.
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understanding the differences in the funds’ glide paths and differences in the time at 

which a final allocation is reached. For many investors, the differences among target date 

funds (including target date funds with the same target date) and the risks associated with 

the investment strategies of the funds can be difficult to grasp. The DOL’s proposal is 

focused appropriately on requiring disclosure of a target fund’s asset allocation at its 

target date and requiring that the fund’s glide path be presented graphically in materials 

provided to plan participants.7

 Combined with required disclosure about the risks of 

target date funds, this information will make it easier for investors to understand the 

operation of particular target date funds, to compare target date funds with one another,

and to compare target date funds with other potential investment options they might 

select.

We note that the new disclosures to retirement plan participants in the DOL’s proposal 

mirror those that would be required under the Securities and Exchange Commission’s 

(SEC) recently proposed amendments to target date fund advertisement and marketing 

rules.8

 We believe it very important that the disclosures under each regulatory scheme 

remain consistent, and do not subject funds and their advisers to two different sets of 

requirements. 

GAO Study

 The benefits outlined above provide strong reason for the DOL to adopt the 

proposed rules and we applaud the initiatives in this regard. We note, however, that the 

Dodd-Frank Wall Street Reform and Consumer Protection Act directs the Government 

Accountability Office to conduct a study of mutual fund advertising (“GAO Study”).

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Because that study may in turn lead to further legislation or rulemaking by the Securities 

and Exchange Commission and/or the DOL with regard to disclosures about investment 

vehicles, the DOL may wish to postpone finalizing the rules proposed in the Release to 

allow time for the results of the GAO Study to inform the rules ultimately adopted. 

 7 We note that some target date funds are constructed with explicit discretion left to management to alter 

asset allocation tactically along the glide path, including the period after the target date. Therefore, we 

encourage disclosures in, or adjacent to, the graphic describing the permitted ranges (if any) around the 

fund’s glide path.

8 Proposed Rulemaking: Investment Company Advertising: Target Date Retirement Fund Names and 

Marketing, Securities Act Rel. No. 9126 (June 16, 2010) [75 FR 35920 (June 23, 2010)] (“SEC Proposal”).

9 Public Law No: 111-203, Title IX, Sec. 918 

The Comptroller is required to conduct a study, and to report to the Congressional Banking 

Committees within 18 months after enactment of the Act, on mutual fund advertising to identify: 

(i) existing and proposed regulatory requirements for open-end investment company 

advertisements; (ii) current marketing practices for the sale of open-end investment company 

shares, including the use of past performance data, funds that have merged, and incubator funds; 

(iii) the impact of such advertising on consumers; and (iv) recommendations to improve investor 

protections in mutual fund advertising and additional information necessary to ensure that 

investors can make informed financial decisions when purchasing shares. 
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* * * * *

In sum, these proposals represent an important step forward in improving 

disclosures regarding target date funds to retirement plan participants in a way that will 

make information about such funds more accessible and more understandable for 

investors. We therefore encourage the DOL to adopt and implement this proposal, with 

the modest delay we suggest to consider the results of the forthcoming GAO Study, and 

in harmony with the SEC Proposal.

We would welcome the opportunity to discuss our views with the DOL in greater 

detail. Please feel free to contact me at (202) 507-4492 or david.schwartz@mfdf.org at 

any time. Thank you again for the opportunity to comment on these proposals.

Sincerely,

David S. Schwartz

Senior Counsel

cc: Jennifer B. McHugh, Acting Director,

Division of Investment Management,

U. S. Securities and Exchange Commission