AFS Financial Group, LLC 

7610 Old Georgetown Road 

Plaza Level 

Bethesda, MD 20814 

January 12, 2011 

By electronic mail to e-ORI@dol.gov 

Office of Regulations and Interpretations 

Employee Benefits Security Administration 

Attn: Target Date Disclosure 

Room 5655-N 

U.S. Department of Labor 

200 Constitution Ave., NW 

Washington, DC 20210 

Re: Comments on Proposed Target Date Disclosure 

Ladies and Gentlemen: 

AFS Financial Group appreciates the opportunity to comment on the proposed regulation to require 

additional disclosure for Target Date investment vehicles used in defined contribution qualified 

retirements plans. 

As a retirement plan advisory firm, AFS Financial Group provides independent and objective advice and 

services to plan committees, fiduciaries and participants in a fully transparent manner. Our core values 

are 1) implementing processes and procedures to lead and advise retirement committees and fiduciaries 

through a consistent program of diligence according to their ERISA responsibilities. Simultaneously, 2) 

we aim to provide plan participants with education and advice in order to help them best utilize their 

employer's retirement plan and get on track towards saving an adequate amount for their retirement. 

Most of our client relationships are with companies and organizations in the small and mid market 

(loosely defined as 50 - 5000 employees) where Target Date investment vehicles (TDFs) playa critical 

role in helping these organizations achieve their goals. 

We are supportive of the DOL's goals to provide more information and resources to help both plan 

sponsors and their participants better understand and evaluate their investment options. The following 

comments offer our opinion on how this regulation should be shaped to provide retirement plan 

participants and beneficiaries with sufficient information and resources to make informed decisions, 

while also affording plan fiduciaries, sponsors and service providers with a practical and efficient 

approach to delivering these additional disclosures. 

Securities and Advisory Services offered through Commonwealth Financial Network,® Member FINRA/SIPC, a Registered Investment Adviser 
TDFs allow investors, and more specifically, retirement plan participants to invest utilizing a single fund 

into a diversified portfolio in a more appropriate and suitable manner than many would select on their 

own. However, most TDF fund names are strikingly similar giving participants a misconception that they 

are managed with the same or similar investment strategy. There is simply too much disparity between 

investment objectives and strategies within funds that have the same core name (ex. XXXX 2010 Fund). 

Nonetheless, when properly monitored, TDFs can provide a worthwhile vehicle and simplistic approach 

to help achieve the common goal of most retirement plans: financially preparing participants for 

retirement. 

Our expectation would be that prudent plan sponsors could select, monitor and offer a TDF series for 

their participants and satisfy both QDIA safe harbor and the general investment requirements under 

section 404(a) of ERISA. As detailed in previous TDF guidance under a DOL bulletin this past summer, 

committees and fiduciaries should be required to follow a consistent investment review process for the 

initial selection and on-going monitoring of TDFs just as required under 404(a). In order to satisfy QDIA 

safe harbor status, the TDF series shall be analyzed considering the plan participants' demographics, 

investment habits and distribution history (when applicable). 

In order for plan fiduciaries to fulfill this responsibility, TDF manufacturers should be able to provide 

simple and straightforward disclosures on a one-page fact sheet that explain for each TDF (as part of a 

series) the following: 

•	 historical performance and fee information 

•	 investment objectives & strategy and holdings 

•	 adjustment of investment allocation overtime (glide path) 

•	 investment strategy timeline (period when the glide path reaches final allocation. [Ex. "to" or 

"through" retirement.] This has also been explained as the "significance ofthe target date". Is 

the TDF's glide path strategy created to last up until the target date, or through the investor's 

retirement?) 

In addition to these disclosures, we recommend that each TDF name shall include a standard 

reference to risk compared to a benchmark of TDFs within the specific vintage. For example, if the 

2030 TDFs across all manufacturers had an equity allocation range from 60 - 90%, a general 

benchmark shall be created. If, based on the data, the median benchmark allocation was 75/25 - a 

2030 TDF with an allocation of 90% equities would be named, "Manufacturer Name" 2030­

Aggressive. By including a risk component to the title, it shall provide an additional resource for users 

to gain a better understanding of the underlying risk exposure. In theory, each vintage in one 

manufacturer's TDF series would have the same risk name based on their higher (or conversely, 

lower) equity allocation (and potential other factors like asset class usage) when compared to a 

benchmark allocation. 
This type of investment information shall be provided and then reviewed by plan fiduciaries (and their 

consultants) utilizing consistent and objective criteria, and procedural prudence, to determine suitability 

for the plan as either a stand-alone investment menu option or, in combination, as the QDIA. 

For plan participant's, the same disclosures should be made readily available. TDF manufacturers should 

supply investors with one-page fact sheets (commonly made available and used within the industry 

already) that incorporate the information above in a simple manner. In addition to their disclosure in 

general sales material and investment prospectuses, the required one-page fact sheet disclosures 

should be provided to investors (retirement plan participants and their beneficiaries) directly from plan 

sponsors, or by proxy, through the plan's investment manufacturers, platform vendor, consultant or 

other service providers. 

As detailed in the final regulation, section (c) (3L participants should be furnished with an initial notice 

prior to their eligibility into the plan (or upon their automatic enrollment into a QDIA). They should also 

receive an annual notice for each subsequent plan year, specifically, for those investors utilizing or being 

automatically invested into the TDF. 

We are confident that the disclosure of TDF information as explained above (similar to the final 

regulationL is helpful to plan fiduciaries in determining suitability, without creating additional 

administrative or cost burdens. Further, the disclosure and delivery of such information to plan 

participants shall better clarify the investment objective and strategies of TDFs without the need for 

extensive or onerous research by plan participants and beneficiaries. 

Finally, although the DOL has indicated that they will soon release a "notice for comments" on 

disclosure delivery methods in the very near future, we would be remiss not to provide our thoughts 

since this aspect of the disclosure is critical to its benefit for retirement plans. The delivery and 

dissemination of these disclosures shall be provided to plan participants via a method that has been 

determined to be acceptable to reach participants and eligible employees for that organization. For 

instance, if the organization both provides and often utilizes e-mail as a standard method of 

communication, it shall be considered acceptable for plan participants to receive these disclosures 

electronically. 

In closing, we have careful discussed and debated this topic in an effort to provide both our clients and 

all plan participants with the most efficient method to utilize these investment vehicles for the benefit 

of their retirement planning purposes. We approve the efforts that the DOL and many practitioners in 

the industry have made to promote prudent activities within the retirement plan industry. We are 

steadfast in our recommendations to require additional disclosures for TDFs in a manner that helps plan 

fiduciaries fulfill their legal role and promotes effective investment decision making by plan participants. 
Let me once again thank the Department for the opportunity to provide our comments on final 

regulation 29 CFR Part 2550. If I can provide further clarification or additional examples of how these 

disclosures may be applied in practice, please contact me at (301) 961-2642. 

Sincerely, 

Alexander G. Assaley III, AIF 

Adviser- Retirement Plans 

AFS Financial Group, LLC 

7610 Old Georgetown Road 

Plaza Level 

Bethesda, MD 20814 

alexa@afsfinancialgroup.com