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Steve Chiotakis: The Senate's Special Committee on Aging meets today. It'll discuss new rules for retirement-savings funds -- particularly the so-called "target-date fund." From Washington, Ronni Radbill reports.
Ronni Radbill: Target-date funds were sold to people planning for retirement. As they take a beating with the plunging stock market, the funds are coming under increased scrutiny for more regulation. Also known as lifecycle funds, target-date funds are a mix of stocks and bonds. They're designed to simplify long-term investing by automatically adjusting to more conservative investments as time goes on.
Economist Monique Morrisey with the Economic Policy Institute says target-date funds lulled 401K participants into a false sense of security.
Monique Morrisey: They had the idea that if they invested in stocks early in their careers, they could take advantage of stock market returns and then lock in their gains.
But that's not the case. Jack Vanderhei is Research Director at the Employee Benefits Research Council:
Jack Vanderhei: Just because it is the appropriate target-date fund selection for you today does not necessarily mean that it will continue to be that way in the future.
The Special Committee on Aging will ask the Department of Labor and the Securities and Exchange Commission to regulate the composition and advertising of target funds.
In Washington, I'm Ronni Radbill for Marketplace.