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Filed Electronically

July 3, 2014

Office of Regulations and Interpretations
Employee Benefits Security Administration
Room N-5655,

U.S, Department of Labor

200 Constitution Avenue NW

Washington, DC 20210

Attention: RIN 1210-AB38; Target Date Disclosure
Ladies and Gentlemen:

Great-West Financial (“Great-West”) appreciates this opportunity to comment on the Department of
Labor's (“Department’s”) proposed rule on required disclosures for target date funds ("Proposal").
Great-West provides services to more than 30,000 retirement plans and almost 5 million participants
in defined contribution plans. We support the Department's efforts to ensure that participants
making the decision to invest in a these types of investment products are able to make fully informed
investment decisions.

We agree with the Department that there is a need to improve disclosure. Choosing a target date
fund is a unique investment decision as the decision is intended to be, and in practical terms often is,
a “set it and forget it" investment choice. We urge the Department to ensure that all participants
investing in these types of products, regardless of whether they are unitized funds, model portfolios,
or other types of asset allocation vehicles, receive the same degree of disclosure and the same
Opportunity to make an informed investment decision. Participants who are offered a generic asset
allocation solution (as opposed to a solution designed for their individual investment needs, such as a
managed account solution) need to understand how the investment works as a whole so they can
determine whether it meets their investment needs

It is essential that all participants investing in a "set it and forget it" type investment receive all of the
information required to be disclosed with respect to designated investment alternatives under ERISA
§. 404a-5, as well as the supplementary information contained in the Department's Proposal.
Participants investing in these funds typically do so with the expectation that, as long as they pick a
targeted date that is closest to their retirement age, no further investment decision making will be
required and they will be appropriately invested until that date is reached. Participants who do not
understand the level of risk they will be taking, what happens when the targeted date is reached,
how the fund's performance compares with other similar funds, what fees they will be paying, etc.,
may "set and forget" an investment decision that is inconsistent with their investment philosophy
and/or retirement funding goals without having any idea that they have done so.

ARIK E ARCHARN BNAN. GRERAMAINAN Wt ARE RA ands - 7209) 797.aNAN


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Under the Department's current disclosure rules’ participants who are offered a "set it and forget it"
investment product that is a unitized investment receive full disclosure under ERISA Sect. 404a-5 of
fee and performance information while those invested in model portfolios are only required to
receive very general information about how that investment choice may differ from selecting an
individual fund. Participants receive detailed information about the underlying funds in a model
portfolio but, unless the underlying funds are not otherwise designated investment alternatives or
the model portfolio is a Qualified Default Investment Alternative {QDIA), they receive no detailed fee
and performance information about the mode! portfolio itself. Please see the attached chart fora
detailed explanation of the discrepancy in information participants receive. Somewhat ironically,
participants who are defaulted in to a model portfolio, who arguably are much less likely to review
fee and performance information than those who actively choose it, receive more robust disclosure
than those choosing a model portfolio that is not a QDIA..

Certainly there is no argument to be made that participants who are offered model portfolios have
less need to be fully informed or are less deserving of it. The only possible argument for denying
them the opportunity to make fully informed investment choices is a cost vs. benefit argument. We
are concerned that the Department may have reached its conclusion on that argument based on
assumptions that do not reflect the realities of the marketplace and/or underestimate how critical an
investment decision this is for all participants.

Great-West serves over 15,000 small 401(k) plans and, in that market, asset allocation models are
often offered at the financial advisor level, not the plan level. In other words, an advisor or other
financial services provider will design asset allocation models and the same model with the same
underlying funds may be used in multiple plans they serve that are seeking this type of investment
product. Truly customized models that are designed for a specific plan are typically seen in large
plans with thousands or tens of thousands of participants due to the cost of Operating these types of
investments. In many instances, therefore, the cost of providing disclosure can be spread among
many plans and/or participants. When you compare that cost to the benefit of giving all participants
the information they need to make what for many, will be the most important investment decision
they will ever make, it is difficult to argue that there should be an unlevel playing field regarding
disclosure.

Since 2012 when the Department's 404a-5 disclosure rule went into effect participants who are
offered generic "set it and forget it" asset allocation investments that are model portfolios per the
Department's definition have been disadvantaged in their ability to make informed investment
decisions. As the Department contemplates adding new disclosure requirements that will further
enhance a participant's ability to make this critical investment decision a well informed one, that
inequity should be addressed. It is completely irrelevant from the participant's perspective whether
the asset allocation investment option they are offered is a model portfolio or a unitized fund. All
that matters is whether it is the right investment for them taking into account their individual
circumstances and investment philosophy. We commend the Department for providing critically
needed help to participants selecting these investments and strongly encourage it not to leave
hundreds of thousands of participants without the benefit of these disclosures simply because their
plan offers a model portfolio instead of a unitized fund.

REIRE ARCHARN BNAN . GARENAINAN WIL AGE CA Aani4s .09n2737-4NNNn


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Thank you again for the opportunity to comment. If you have any questions regarding this letter,
please do not hesitate to contact me at 303-737-3086 or via e-mail at

Charlie.nelson@greatwest.com.

Regards,

Charles P. Nelson
President, Retirement Services
Great-West Financial

‘ FAB 2012-02R, Q 28

ARIRE ARCHORN RONAN. GREENMINAN WIE ARE CO anit. /an 7497-aNAN