NEWS RELEASE
June 18, 2009
PR-09/20
For additional information:
Jason Hammersla
202-289-6700
jhammersla@abcstaff.org
Target-date fund regulations must focus on existing investment selection process, provide flexibility
WASHINGTON, D.C. — “Employer plan sponsors take their fiduciary responsibility very seriously and currently devote substantial resources toward the investment selection process and detailed communications to employees,” said Lynn Dudley, senior vice president, policy, at the American Benefits Council, in reference to today’s joint Department of Labor/Securities and Exchange Commission hearing on target date funds. “As these agencies consider new regulations governing these funds, it is essential that they avoid overly prescriptive rules for a specific type of fund.”
Allison Klausner, Assistant General Counsel – Benefits for Honeywell International Inc., testified at the hearing on behalf of the Council, urging the agencies to draft regulations that do not mandate the features and characteristics of target date funds. “The focus should be on whether the existing process employed by fiduciaries is designed to identify target date funds that are appropriate as an investment within a menu of investment funds and as a default investment fund for participants,” Klausner said. “Any regulations should permit plan fiduciaries to make prudent decisions appropriate for its body of plan participants. We ask the agencies to respect that one size and one style will not be best for all plans.”
Klausner’s testimony described the following issues:
- the process of selecting and evaluating target date funds, focusing on Honeywell’s experience;
- disclosure and understanding the specifics of these funds;
- mandated glide paths and fiduciary responsibilities; and
- custom and readily available target-date funds.
Klausner's testimony is available on the Council Web site. For more information, or to arrange an interview with Council staff, please contact Jason Hammersla, Council director of communications, at jhammersla@abcstaff.org or by phone at 202-289-6700 (office) or (202) 253-5458 (cell).
The American Benefits Council is the national trade association for companies concerned about federal legislation and regulations affecting all aspects of the employee benefits system. The Council’s members represent the entire spectrum of the private employee benefits community and either sponsor directly or administer retirement and health plans covering more than 100 million Americans.
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