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Target-Date Funds
New Vanguard research finds 80% of participants under 35 hold only a target-date or balanced fund, versus 43% of those 55 and older, and the share of all participants using a single fund jumped from 46% in 2016 to 66% in 2025. Menus keep shrinking in response, though Vanguard cautions that participants nearing retirement may still benefit from a broader lineup.
Sixty-one percent of participants on Vanguard's recordkeeping platform held a single target-date fund in 2025, up from 46 percent in 2016, and 66 percent held just one fund of any kind. Vanguard credits automatic enrollment, which nearly 80 percent of large plans now use, and target-date defaults for the simplification.
The Pension Protection Act (PPA) didn't invent automatic enrollment, target-date funds, or professional investment management. But it was arguably a transformative shift in the design of workplace retirement plans, and the focus of those who support them.
Target-date assets are positioned for another leg of growth as demand shifts toward personalization and retirement-income features. A companion data point to the $5.3 trillion TDF market coverage in Tuesday's issue.
In a published opinion, the Eleventh Circuit reversed summary judgment for Royal Caribbean in the imprudence suit over its proprietary Russell target-date funds, holding that a plaintiff need not identify an apples-to-apples comparator to establish objective imprudence in every case. Qualitative evidence such as a fund's unpopularity and negative analyst ratings can carry the point, and a fund's own custom benchmark is not automatically the only proper measuring stick when the plaintiff's theory is that the benchmark's built-in features are what made the fund imprudent.
A Minnesota federal judge allowed target-date imprudence and self-dealing claims against 3M to proceed after finding the amended complaint's Fidelity Freedom fund comparison a meaningful benchmark, while narrowing other theories. The suit was dismissed this spring with leave to amend for exactly this deficiency, so the ruling shows what a benchmark allegation that works actually looks like.
Twenty years after the Pension Protection Act made target-date funds the default, Sway Research maps a $5.3 trillion TDF market shifting toward collective investment trusts and retirement-income features.
The counterpoint to the 3M ruling, from the same Minnesota federal court: in Scholin v. Digi-Key, Judge Bryan dismissed a challenge to American Century target-date funds because the complaint never explained why its comparator funds were comparable, calling their composition a mystery. Together the two rulings sketch the line between benchmark allegations that survive and ones that don't.
A new complaint alleges fiduciaries selected underperforming target-date funds, and industry observers read it as a warning shot at wealth firms converging on the retirement plan arena. Fiduciary litigation following the money into the advisory consolidation wave.
The ADP fiduciary committee will review its retirement plan’s target-date funds as part of the settlement.
Incorporating guaranteed income into this already popular product presents a cost-effective, ‘pension-like’ strategy.
Recent analysis projects private capital could make up 6% of assets in defined contribution plans by the end of the decade, driven by gradual adoption through target-date funds, collective investment trusts and the DOL’s proposed safe harbor for fiduciaries.
Former employees at American Express (Amex) have filed suit alleging that the credit card company maintained underperforming funds in its 401(k) plan, including target-date funds (TDFs).
If your retirement plan holds American Century One Choice target-date funds, you have a target on your back. More than a dozen ERISA class actions have been filed against plans holding this single fund suite since early 2026, and the pace is accelerating
SpaceX's record-fast addition to the Nasdaq-100 means millions of retirement savers now have indirect exposure to the newly public company through index funds and some target-date portfolios.