I 

Washington, DC 20210 

Attention: Target Date Amendments 

Re: Proposed Regulation for" Tar"get Date Retirement Funds 

Ladies and Gentlemen: 

Wells Fargo & Company ("Wells Fargo") I appreciates the opportunity to comment on the 

Department of Labor' s (the "Department") proposal (the "Proposal") published in the Federal Register of 

November 30, 2010.

2 The proposal would, among other things, require plan fiduciaries of defined 

contribution plans with participant-directed investments to provide additional disclosures to p3liicipants 

regarding retirement funds that are designated qualified default investment alternatives ("QDlAs"), 

including target date funds or similar investments. In particular, the rule seeks to specify information that 

must be furnished in the required notice to participants ("QDlA Notice"). The Proposal also would 

require disclosures be furnished in an appendix to the participant-level disclosures required by the 

Department's regulation adopted on October 20,2010 ("Participant-Level Disclosures"). 

Wells Fargo Institutional Trust and Retirement is a leading provider of recordkeeping, trustee, 

and investment services to retirement plans. In addition, Wells Fargo has been a pioneer in the target date 

fund area and was one of the first sponsors to offer target date funds more than 15 years ago in 1994. 

Wells Fargo Funds Management, LLC currently serves as the investment adviser to ten Wells Fargo 

Advantage Dow Jones Target Date FundssM . Each Wells Fargo Advantage Dow Jones Target Date Fund 

uses an asset allocation strategy designed to replicate, before fees and expenses, the total return of a Dow 

Jones Target Date Index that has the same target year as the Fund. As a significant player in the 

retirement and target date fund industry, we take great interest in the Proposal and its potential impact on 

retirement plan participants and fund sponsors. As such, we are pleased to share with the Department our 

thoughts on certain aspects of the Proposal. 

Wells Fargo is a financial services company employing almost 280,000 team members. Its businesses include 

Wells Fargo Funds Management, which serves as the investment adviser to the Wells Fargo Advantage Funds, with 

over $250 billion in assets under management, and Wells Fargo lnstitutional Trust and Retirement, a national leader 

in retirement plan, investment management, trust and custody, and benefits consulting services for institutional 

clients. 

275 Fed. Reg. 73987 (Nov. 30,2010) (the "Release"). 
Office of Regu lations and 

Employee 

U.S. Department 

January 14, 2011 

Page 2 of6 

I. The Age 

Date Relevance Disclosures 

We generally support the 

information regarding 

key risk disclosures. Clear and 

vehicles will provide a 

more detad below, we 

unwarranted and should not 

Are Unnecessary and Should Be Included Within the 

Proposal to mandate the disclosure of 

including a fund's asset allocation over time 

of the most significant features of 

to make informed investment decisions. As 

a paliicular disclosure item set forth in the 

Depaliment's final regulation. 

rp.rl11l1"" that if the target date fund is named or described in 

date), participants must receive a number 

whom the investment is designed (the 

Relevance Disclosure"); and any assumptions a 

on or the date ("Contribution/Withdrawal 

ropOSI;;O requirement to provide an Age IS 

the concerns raised this 

which we is more tailored to 

inform participants 

The are not designed for any particular age 

an investment in a target date fund, the 

compnsmg an age group may significantly--in their preferences and 

that are germane to selecting an date fund and its asset allocation. 

Age Group Disclosure to on the assumption that participants within a certain age 

range tend to share sufficiently simi lar financial situations, risk tolerance profiles and wealth 

accumulation goals that favor a asset al structure for that group. We believe the accuracy 

this premise can be called into question in a number respects. 

For example, we would 

varied saving rates, possess highly diverse 

and outside of the retirement plans in which 

a range of total values of retirement 

may manage investments outside of 

favor a target date fund with a more 

linked to their age group. Conversely, 

profi les and goals independent age that 

glide path would be appropriate. In contrast to 

Relevance Disclosure 

characteristics, including 

who are 

and contribution 

The definition an 

Group Disclosure may also present 

age group may employ broadly 

profiles and wealth levels (both within 

plan to at different ages and 

some participants within the same age bracket 

with characteristics that would lead them to 

path than one that would typically be 

.rrc ... "",nt age groups may have similar investment 

to conclude that the same asset allocation 

an explanation of the Date 

the date fund's 

year that are relevant to investors diverse in age 

which may be only partially based on 

group" for purposes of the 

date funds offered as investment 
Interpretations 

Administration 

within a plan will typically be pa11 ofa suite of target date funds. 

or 10-year interval.s between the years within target date fund names 

Fund, ABC Target 2030 Fund, etc.), all based on a 

a plan fiduciary may elect to make only funds J 

of target date funds sponsored by the fund company 

Group Disclosure furnished by the sponsoring fund company may 

with a smaller span of years than those avai lable to in 

to inapplicable or confusing explanations about any age group for whom that Fund is 

funds are not used exclusively as retirement 

date fund to invest for college tuition 

years following the year stated in the 

Disclosure would not 

an 

II. The Should Clarify that Disclosure of ContributionlWithdrawal Assumptions 

Take the Form of a Generalized Explanation 

that the Investment Company Institute ("ICI") intends to 

Proposal that requests, among other things, that the Depal1ment 

Contribution/Withdrawal Assumptions Disclosure In 

that the disclosure could be satisfied with a high-level, generalized explanation rather than a 

such assumptions. We agree with and suppol1 the comments on this 

and will defer to the more detailed explanations provided in comment letter. 

III. Plan Fiduciaries Should Have the Option to Furnish Required 

to Participants by Delivering or Making Electronically Available a I",-,,,,,,, .. , ... t .. ,, 

or a Disclosure Document That Meets All of the 

Disclosure Requirements for Target Date Funds 

that the Department should clarify in the final rule that plan 

to to plan pal1icipants a fund 

are perm itted 

summary 
investment issuers and 

to ,,3 From the np,·Cn,>l't. 

the required information from the 

presentation corresponding solely to 

furnishing the additional information contained in a 

fund disclosure document to participants would not 

need to expend time and resources the 

process could prove particularly onerous, ly as it 

representations or depictions of the glide path. lfthe 

paliicipants exclusively with those date fund 

assessment of the cost impact of the Proposal would 

to provide 

be accurate if 

IV. 	 The Department Should Clarify that QDIA Notice Requirements May Be 

Satisfied by Including Required Fund with Disclosures Complying 

to 

target date funds in the QDIA Notice and as an appendix to the 

with the Proposal, the Department has also 

plan fiduciaries to furnish all participants (including 

significant amount of information all 

concerned that the combined effect of the both 

participants unless the two proposals are coordinated so that plan 

information about 

We are 

Depaliment's Proposal that requests, among other 

two regulations to permit plan fiduciaries to 

participant disclosure regulations. The 

we urge the Department to carefully consider and 

a comment letter on the 

and combine the 

the 

with New Participant-Level Disclosure Regulations 

The Proposal would require plan 

requirements utilizing only a single disclosure document. 

Proposal. 

V. 

Release at 73993. A similar assessment and rationale was made with to the cost ofthe 

target date fund disclosures in the notices, 

Required Risk of Loss and 

Plan Investment Alternatives and Not 

Be on All 
specifically to target date funds relative to other investment alternatives. Accord ingly we urge the 

Department to require the same risk statements with respect to aJi investment options available in a 

retirement plan. 

VI. 	 The Department Should Clarify That Service Providers Building Custom Target Date 

Po."tfolios Rather Than Non-Management Service Providers Would Be Responsible fOl" 

Producing the Required Disclosures 

Custom designed and constructed target date portfolios and funds ("Custom Target Date 

Portfolios") create special challenges for plan administrators and other plan service providers who are not 

responsible for investment management or investment selection for plan options ("Non-Management 

Service Providers") seeking to comply with the Proposal because of the heightened complexity 

surrounding these offerings. Custom Target Date Pot1folios typically employ a structure in which a 

fiduciary designs a tailored glide path for a plan that in turn utilizes different investment managers to 

handle underlying asset class investment strategies. In light of the unique design and flexibility in the 

asset allocation design and varied investment manager choices of a Custom Target Date Portfolios and the 

associated difficulties of customizing a QDIA Notice and Participant-Level Disclosures, the Proposal 

could impose a significant burden on Non-Management Service Providers if the responsibility for 

producing the required disclosures is not more clearly assigned to those service provider(s) that have the 

requisite information necessary to create the disclosures. 4 Plan service providers that build and manage 

Custom Target Date Portfolios, such as consultants, advisers, plan sponsors and asset managers, are better 

positioned than Non-Management Service Providers to provide the required disclosures for investment 

options having this degree of complexity. Accord ingly, the Department should clarify that the obi igation 

to produce required disclosures for Custom Target Date Portfolios should belong to such service 

provider(s) and not to Non-Management Service Providers. 

VII. 	 With Respect to New Custom Target Date Portfolios That Have No Historical Performance 

History, the Department Should Provide Plan Fiduciaries with the Option to Furnish 

Participants with Performance Information for Underlying Funds within Such Portfolios 

In many cases, a Custom Target Date Portfolio reflects a unique asset allocation strategy designed· 

for a single participant based on his or her individual circumstances. When such portfolios are first 

offered to a participant, the Custom Target Date Portfolio itself has no actual historical performance 

history, even though the underlying funds to which pOl1folio assets would be allocated according to the 

4 In this regard, we reiterate our comments regarding the cost benefit assumptions of the Release that are described 

in the last paragraph of Comment III above. 
Office of Regulations and Interpretations 

Employee Benefits Security Administration 

U.S. Department of Labor 

January 14,2011 

Page 6 of6 

custom glide path typically would have performance track records. In these circumstances, it may not be 

appropriate to provide hypothetical performance information of the Custom Target Date Portfolio based 

on the application of the custom strategy to the historical performance of the underlying funds. We 

believe that plan fiduciaries should have the option to provide historical performance information of the 

underlying funds within the new Custom Target Date Portfolios accompanied by appropriate disclosures. 

Those disclosures would explain to participants that that the performance histories of the underlying funds 

are not those of the Custom Target Date Portfolio, which does not yet have any historical performance. In 

the alternative, Plan Sponsors could elect to not provide any historical performance information for a new 

Custom Target Date Portfolio. 

VIII. Additional Disclosuroes Contained in SEC Proposed Rules foro Target Date Fund Advertising 

Are Not Necessary to Include in the Final Rule 

The Department requested comment as to whether the final ru Ie should include disclosure 

elements or concepts contained in the rule proposal made by the U.S. Securities and Exchange 

Commission (" SEC") that would apply to target date fund advertising and sales literature that place a 

more than insubstantial focus on such funds ("SEC TDF Proposal"). Considering the significant overlap 

of disclosure elements between the Department's and the SEC's proposals, we believe the information 

proposed to be furnished to plan participants in the Department's Proposal generally represents an 

adequate mix of core information that will be most useful to plan participants. Accordingly the 

Department should not, in our view, incorporate the SEC TDF Proposal into the final rule . To the extent 

that plan participants are provided target date fund marketing materials subject to the final SEC rule, the 

additional information required by such rule not otherwise reflected in the Department's final rule would 

be disclosed to participants. 

* * * * * 

We appreciate the opportunity to provide comments on the Proposal and the Department's 

consideration of our comments. Should you have any questions, please contact the undersigned at 612-

667-0523. 

vel'truly y~urs, 

auri /~ rd iS: (I n-l

i 'f' ~ Executive Vice President 

Wells Fargo Institutional Retirement and Trust