Target Date Funds as the Default Investment Option

May 2026

A target date suite is a family of individual target date funds (TDFs), each named for a different projected retirement year (e.g., 2030, 2040, 2050), that share a common investment approach and glide path philosophy. Each fund within the suite adjusts its stock and bond mix over time, shifting toward a more conservative allocation as participants approach their stated retirement year. Plan sponsors typically select an entire suite as the menu offering, and participants are defaulted into the individual fund whose vintage year most closely matches their expected retirement date, or can opt out of being defaulted and select another fund in the suite. Target date suites have become the dominant default investment option in defined contribution (DC) plans, with the underlying funds now holding the majority of participant assets in most plans.

Not every committee has conducted a structured review of whether their TDF suite fits the specific needs of their DC plan. This note walks through each stage of the fiduciary obligation for the plan sponsor for selecting and monitoring their TDFs.