Nearly one out of four pension plan participants invest solely in target-date funds, according to new research released from The Vanguard Group—a six-fold increase over the past five years. Further, adoption of these funds among new plan participants is even higher, with 64% of employees entering plan for the first time with a single target-date fund.
According to the firm's research, 82% of defined contribution plans at Vanguard offered a TDF last year. Moreover, among all DC plans at Vanguard, 47% of participants had a position in TDFs, with 24% of all participants invested in a single target-date fund. The funds accounted for 27% of total plan contributions.