Strategy Spotlight

DOL Tips for TDFs: 10 Years of Evolution and Innovation

DOL tips have played an important role shaping the Defined Contributions industry over the last decade, and they will continue to influence the evolving landscape over the next decade.

This year marks ten years since the U.S. Department of Labor (DOL) issued "Target Date Retirement Funds - Tips for ERISA Plan Fiduciaries", or what’s become known as the DOL Tips for TDFs (Tips). Thanks to this regulatory guidance, the target date fund (TDF) market has evolved to respond to plan sponsor and participant needs for greater transparency, flexibility and functionality of TDFs.

Below, we look back on several TDF innovations that have emerged since the DOL Tips were published in 2013 to raise awareness among plan sponsors and fiduciaries about these trends.



In addition to all active and all passive offerings, the TDF landscape has expanded over the last decade to include blend (active and passive) offerings – a natural evolution since the majority of DC core menu assets are invested in some mix of active and passive funds. In the last five years alone, 19 of the 48 TDF product launches were blend . Those numbers make it prudent for fiduciaries to include blend options when reviewing, comparing, and selecting TDFs. As the Tips suggest, non-proprietary TDFs can offer advantages to fiduciaries because it can be challenging to find a single TDF manager who can provide it all. According to the DOL, fiduciaries should consider if a TDF that only allocates to “the vendor’s proprietary funds as the TDF component investments” may or may not be optimal. Some blend TDFs offer a multi-manager approach that mixes active bond managers with passive equity managers. Importantly, research into glide path design will continue to lead to more sophisticated active and blend TDFs (relative to passive TDFs), such as those that increase asset class diversification beyond core U.S. and non-U.S. stocks and bonds.



In 2013, the Tips asked plan fiduciaries to evaluate factors beyond age when considering solutions: “… other characteristics of the participant population, such as participation in a traditional Defined Benefit pension plan offered by the employer, salary levels, turnover rates, contribution rates and withdrawal patterns.”

Today, the industry has recently extended TDF customization from the plan level to personalization at the participant level. For heterogeneous plans, in particular, this development addresses the fine-tuning suggested by the DOL. Personalized TDFs capitalize on participant data readily available on recordkeeping platforms to construct individualized glidepaths. In many cases, these allocations can then be implemented using a combination of prepackaged TDF vintages, resulting in fees similar to those for traditional TDFs. Personalized TDFs are the next step for TDF investing and we expect to see more emphasis on personalization over the next decade.

A note about “to” versus “through.” The Tips suggest considering whether fiduciaries expect participants to immediately leave or stay in plan at retirement to help guide the preferred approach. Personalized TDFs can help resolve this age-old question because the participant’s glidepath adjusts accordingly.



The guidance provided by the Tips suggested developing effective employee communications. Ten years ago, this typically meant paper-based and mass email communications, which offered little participant engagement opportunities. At best, such programs had mixed results.

Today, technology can help deliver multi-faceted and targeted communication programs, and examining participant behavior can make communication even more effective. For example, we know that many employees may not read plan communications if they come from a source they do not recognize. Strategies that overcome this challenge include collaborating with asset managers, recordkeepers and employers to have one voice with materials coming from the employer who participants know and trust the most.

While TDF providers should be able to support how participants consume information, top TDF managers can be very effective at educating participants and shaping better behaviors. For example, having the ability to reassure participants during times of market stress can help them stay focused on the long term and stay invested.


Tips have played an important role shaping the defined contributions (DC) industry over the last decade, and they will continue to influence the evolving DC landscape over the next decade. At PIMCO, we stay abreast of trends through our Defined Contribution Consulting Study and strive to help you fulfill your fiduciary obligations as you continue to serve your plan participants.

1 Sway Research, “The State of The Target-Date Market: 2023.” January 2023

The Author

Georgi Popov

Product Strategist

Bransby Whitton

Product Strategist



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