Target-date funds, revolutionaries of the defined contribution market, are managed as "relics of the past" and in need of sweeping innovation, according to new research from AllianceBernstein.
As the past decade has seen TDFs reach compound in 401(k) menus, their design has become static, reliant on single managers, archaic equity-to-bond portfolio balancing ratios, and little deference to the vital need of income distribution in retirement.
By far the most utilized plan default option, TDFs' failure to keep up with product innovation and the best practices of fiduciaries to pensions and endowments has put defined contribution participants' security at risk, says AllianceBernstein.
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