The Department of Labor announced that beginning in August, it will require asset management firms to provide further information on the risks and benefits of investing in target-date funds, including details on their glidepaths, to employers and employees.

Together with the Securities and Exchange Commission, DOL’s Employee Benefits Security Administration will provide a checklist of information that must be provided.

These details will “ensure that plan participants are provided with comprehensive information to evaluate target-date or similar funds that have been selected as their plan’s default investment,” the Labor Department said.

Senate Special Committee on Aging Chairman Herb Kohl (D-Wisc.), who held hearings on the downfalls of target-date funds following their dismal performance in 2008, applauded the guidance.

“Given that so many Americans are defaulted into target-date funds, I am heartened that both DOL and the SEC are continuing to make oversight of these funds a priority,” Kohl said. “These new regulations are a great first step in helping employers make vital decisions about how their employees’ 401(k) savings should be invested.

“However, more clarity and heightened protections for target-date investors are needed,” Kohl continued, “and I will continue to work to address these issues.”