[Federal Register Volume 74, Number 98 (Friday, May 22, 2009)]
[Notices]
[Pages 24052-24053]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: E9-12024]


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DEPARTMENT OF LABOR

Employee Benefits Security Administration

SECURITIES AND EXCHANGE COMMISSION

[Release No. IC-28725; File No. 4-582]


Hearing on Target Date Funds and Similar Investment Options

AGENCIES: Employee Benefits Security Administration, U.S. Department of 
Labor (``Department'') and Securities and Exchange Commission 
(``Commission'') (each, an ``Agency,'' collectively, the ``Agencies'').

ACTION: Notice of hearing.

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SUMMARY: Notice is hereby given that the Department of Labor and the 
Securities and Exchange Commission will hold a joint one-day hearing on 
issues relating to investments in target date funds and similar 
investment options by 401(k) plan participants and other investors.

DATES: The one-day hearing will be held on June 18, 2009, beginning at 
9 a.m., EST.

ADDRESSES: The hearing will be held at the U.S. Department of Labor, 
200 Constitution Avenue, NW., Washington, DC 20210.

FOR FURTHER INFORMATION CONTACT: Fred J. Wong, Office of Regulations 
and Interpretations, Employee Benefits Security Administration, U.S. 
Department of Labor, at (202) 693-8500, or Tara R. Buckley, Office of 
Chief Counsel, Division of Investment Management, U.S. Securities and 
Exchange Commission, at (202) 551-6825. These are not toll-free 
numbers.

SUPPLEMENTARY INFORMATION: ``Target date'' or ``lifecycle'' funds and 
other similar investment options (``TDFs'') are investment products 
that allocate their investments among various asset classes and 
automatically shift that allocation to more conservative investments as 
a ``target'' date approaches. This shift in asset allocation, often 
referred to as a fund's ``glide path,'' may differ significantly among 
funds with the same target date. Recent studies suggest that TDFs are 
becoming more common as investment options in participant-directed 
retirement plans, such as 401(k) plans.\1\ The growing popularity of 
TDFs has focused attention on issues relating to the design, operation 
and selection of TDFs as investment options. The designation of 
investment options to be made available under a private-sector 
retirement plan is governed by the fiduciary responsibility provisions 
of the Employee Retirement Income Security Act of 1974 (``ERISA''). 
Persons with this responsibility must prudently select and monitor 
those investment options.
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    \1\ Employee Benefits Research Institute Issue Brief 
<greek-i>327, March 2009.
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    The Department's 2008 ERISA Advisory Council studied several 
aspects of TDFs as 401(k) plan investment options, including the 
challenges and risks they may pose to plan fiduciaries and to 
participants who invest in TDFs, the different types of TDFs, and 
appropriate criteria for adopting and monitoring them. In its 2008 
report to the Secretary of Labor, the Advisory Council recommended that 
the Department provide additional guidance to plan fiduciaries on the 
selection and monitoring of TDFs. The Advisory Council also called for 
the development of participant education materials and illustrations to 
enhance awareness of the value and the risks associated with these 
investments.\2\
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    \2\ See 2008 ERISA Advisory Council Working Group Report on Hard 
to Value Assets and Target Date Funds, found at: http://www.dol.gov/ebsa/publications/2008ACreport1.html.
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    The U.S. Senate Special Committee on Aging recently began an 
investigation of certain TDFs marketed to 401(k) plans. In preliminary 
findings shared with the Agencies, the Committee found a wide range of 
objectives, portfolio compositions, and risks among same-year TDFs. The 
Committee expressed concern that, given these variations, some 
investors may be investing in TDFs without being aware of the financial 
risk. The Committee therefore urged the Agencies to commence a review 
of TDFs.\3\
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    \3\ The Committee held a related hearing on February 25, 2009. 
See: http://aging.senate.gov/hearing_detail.cfm?id=309027&.
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    In view of the importance of these issues for the retirement 
savings of investors, the Department and the Commission have decided to 
hold a public hearing. The primary purpose of this hearing is to 
determine if additional guidance by either Agency would be helpful. The 
Agencies are specifically interested in obtaining information on:
    <bullet> How TDF managers determine asset allocations and changes 
to asset allocations (including glide paths) over the course of a TDF's 
operation;
    <bullet> How they select and monitor underlying investments;
    <bullet> How the foregoing, and related risks, are disclosed to 
investors; and
    <bullet> The approaches or factors for comparing and evaluating 
TDFs.
    The hearing will be held on June 18, 2009, beginning at 9 a.m. and 
ending at

[[Page 24053]]

5 p.m., EST, in the plaza auditorium of the U.S. Department of Labor, 
Francis Perkins Building, at 200 Constitution Avenue, NW., Washington, 
DC 20210.
    Persons interested in presenting testimony and answering questions 
at this public hearing must submit, by 3:30 p.m., EST, June 5, 2009, 
the following information: (1) A written request to be heard; and (2) 
An outline of the topics to be discussed, indicating the time allocated 
to each topic. It should be noted that, while reasonable efforts will 
be made to accommodate all requests to testify, it may be necessary to 
limit the number of those testifying in order to adhere to the 
hearing's one-day format. Any persons not afforded an opportunity to 
testify will nonetheless have an opportunity to submit a written 
statement for the record. The hearing will be open to the general 
public.
    Because the Agencies will jointly review all responses submitted, 
interested parties may send requests and outlines to either Agency and 
need not submit responses to both Agencies. Respondents are encouraged 
to use the title ``Target Date Fund Joint Hearing'' to facilitate the 
organization and distribution of responses between the Agencies. 
Interested parties are invited to submit responses to:
    Employee Benefits Security Administration, U.S. Department of 
Labor: To facilitate the receipt and processing of responses, the 
Department encourages interested persons to submit their requests and 
outlines electronically by e-mail to <a href="/cdn-cgi/l/email-protection#88eda5c7dac1c8ece7e4a6efe7fe"><span class="__cf_email__" data-cfemail="93f6bedcc1dad3f7fcffbdf4fce5">[email protected]</span></a>. Persons submitting 
requests and outlines electronically should not submit paper copies. 
Persons submitting requests and outlines on paper should send or 
deliver their requests and outlines (preferably at least three copies) 
to the Office of Regulations and Interpretations, Employee Benefits 
Security Administration, Attn: Target Date Fund Joint Hearing, Room N-
5655, U.S. Department of Labor, 200 Constitution Avenue, NW., 
Washington, DC 20210. All requests and outlines submitted will be 
available to the public, without charge, online at http://www.dol.gov/ebsa and at the Public Disclosure Room, N-1513, Employee Benefits 
Security Administration, U.S. Department of Labor, 200 Constitution 
Avenue, NW., Washington, DC 20210.
    Securities and Exchange Commission: Responses may be submitted by 
any of the following methods:

Electronic Responses

    <bullet> Use the Commission's Internet comment form (http://www.sec.gov/news/other.shtml); or
    <bullet> Send an e-mail to <a href="/cdn-cgi/l/email-protection#bdcfc8d1d890ded2d0d0d8d3c9cefdced8de93dad2cb"><span class="__cf_email__" data-cfemail="cfbdbaa3aae2aca0a2a2aaa1bbbc8fbcaaace1a8a0b9">[email protected]</span></a>. Please include 
File Number 4-582 Target Date Joint Hearing on the subject line.

Paper Responses

    <bullet> Send paper requests and outlines in triplicate to 
Elizabeth M. Murphy, Secretary, Securities and Exchange Commission, 100 
F Street, NE., Washington, DC 20549-1090.

All submissions should refer to File Number 4-582 Target Date Fund 
Joint Hearing. This file number should be included on the subject line 
if e-mail is used. To help us process and review your requests and 
outlines more efficiently, please use only one method. The Commission 
will post all requests and outlines on the Commission's Internet Web 
site (http://www.sec.gov). Requests and outlines are also available for 
public inspection and copying in the Commission's Public Reference 
Room, 100 F Street, NE., Washington, DC 20549, on official business 
days between the hours of 10 a.m. and 3 p.m. All requests and outlines 
received will be posted without change; we do not edit personal 
identifying information from submissions. You should submit only 
information that you wish to make available publicly.
    The Agencies will prepare an agenda indicating the order of 
presentation of oral comments and testimony. In the absence of special 
circumstances, each presenter will be allotted ten (10) minutes in 
which to complete his or her presentation.
    Information about the agenda will be posted on http://www.dol.gov/ebsa and http://www.sec.gov on or after June 10, 2009, or may be 
obtained by contacting Fred Wong, Office of Regulations and 
Interpretations, Employee Benefits Security Administration, U.S. 
Department of Labor, telephone (202) 693-8500, or Tara R. Buckley, 
Office of Chief Counsel, Division of Investment Management, U.S. 
Securities and Exchange Commission, at (202) 551-6825.
    Those individuals who make oral comments and testimonies at the 
hearing should be prepared to answer questions regarding their 
information and/or comments. The hearing will be transcribed. The 
hearing also will be available via webcast on the Department's Web site 
at http://www.dol.gov/ebsa and on the Commission's Web site at http://www.sec.gov.
    Any individuals with disabilities who may need special 
accommodations should notify Fred Wong on or before June 10, 2009.

Notice of Public Hearing

    Notice is hereby given that a one-day public hearing will be held 
on June 18, 2009, concerning issues related to investments in TDFs. The 
hearing will be held beginning at 9 a.m. in the plaza auditorium of the 
U.S. Department of Labor, Francis Perkins Building, 200 Constitution 
Avenue, NW., Washington, DC 20210.

     Dated: May 19, 2009.

    By the U.S. Department of Labor.
Alan D. Lebowitz,
Deputy Assistant Secretary for Program Operations, Employee Benefits 
Security Administration, U.S. Department of Labor.
    Dated: May 19, 2009.

    By the Securities and Exchange Commission.
Elizabeth M. Murphy,
Secretary.
 [FR Doc. E9-12024 Filed 5-21-09; 8:45 am]
BILLING CODE 4510-29-P; 8010-01-P


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