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Target-Date Fund Use Over Time

16 Pages Posted: 19 Jul 2010  

Craig Copeland

Employee Benefit Research Institute (EBRI)

Date Written: July 1, 2010


The use of target-date funds (TDFs) in 401(k) plans has increased rapidly in recent years. The percentage of all 401(k) plan participants using TDFs increased from 25 percent in 2007 to 31 percent in 2008. One of the reasons for this growth is that TDFs have been a popular choice for the default fund when 401(k) plans have an auto-enrollment feature. Consequently, use of these funds has been found to more likely occur among younger participants, participants with lower account balances, and participants with shorter tenure at their current job, as new workers are the most likely to be auto-enrolled in their employer’s 401(k) plan. This paper examines the persistence of use in TDFs among those who were using these funds in 2007. Therefore, the percentage of participants who remain in these plans is determined, as well as the percentage of participants who added TDFs among those not already using them in 2007. The analysis is focused on 401(k) participants who were in plans that offered TDFs in 2007 to see whether they remained in TDFs, moved out of TDFs, or moved into TDFs if they were not already using them.

The PDF for the above title, published in the July 2010 issue of EBRI Notes, also contains the fulltext of another July 2010 EBRI Notes article abstracted on SSRN: “The Early Retiree Reinsurance Program: $5 Billion Will Last About Two Years.”

Keywords: 401(k) plans, Employment-based benefits, Pension plan assets, Self-directed investments, Target-date funds

JEL Classification: D31, G11, J26, J33

Suggested Citation

Copeland, Craig, Target-Date Fund Use Over Time (July 1, 2010). EBRI Notes, Vol. 31, No. 7, July 2010. Available at SSRN:

Craig Copeland (Contact Author)

Employee Benefit Research Institute (EBRI) ( email )

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