April 4, 2012
It is great that glide path and allocation at retirement will be illustrated to participants. But there is an additional issue regarding participant communication. All the 401(k) providers and asset managers provide participants with retirement income forecasts - estimates of how they might grow their wealth and how they might do in retirement. 99% of the forecast results provided to participants do not use target date glide paths even when a provider is automatically enrolling participants into the target date fund and committing them to this glide path. If target date funds are going to be the investment of choice for the majority of participants the planning tools need to reflect this or participants get unrealistic planning results.