Government Regulators Focus on Target-Date Funds

Ropes & Gray partner George Raine spoke on an Ignites panel, "Target-Date Funds Into the Future," which addressed the impact of increased scrutiny from government regulators and investors on the mutual fund industry.

"With a constantly changing regulatory landscape, mutual fund companies offering target-date funds face significant challenges," says Mr. Raine. "These types of funds represent important retirement accounts for a large number of small investors, many of whom saw their savings evaporate during the recent financial crisis. In the wake of those losses and the ensuing public outrage, a number of regulators, including Congress, the SEC, and the Department of Labor, have applied intense scrutiny to target-date funds. Particular points of focus have been the funds' disclosure practices and the wide variation in how different sponsors structure the asset mixes of their target-date products. No one has a crystal ball, but the panel sought to demystify the ongoing regulatory developments and to assist industry participants in positioning their products, both from a legal and from a commercial perspective." 

Also speaking on the panel were Michael Eldredge, vice president of investment research at MassMutual Retirement Services, and Lynette DeWitt, director of subadvisory and lifecycle fund research at Financial Research Corporation. The panel was hosted by Ignites, a Financial Times service that is a leading online news sources for the mutual fund industry.