Many investors who viewed target date funds as a relatively safe investment were rudely shocked when in 2008 the average fund with a stated target date of 2010 reported a loss of 24.6%. Investors believed that a fund that was investing for someone just two years away from retirement would have had a mixture of investments that would be less vulnerable to a sell -off in the equity markets.

Congress, the SEC and the Department of Labor have each conducted their own investigation and publicly asked for more transparency and possibly implement new rules on disclosure.

Have there been retirement investing within date targeted funds shifts? There has not been any change at least according to Vanguard Group, which has maintained its mandate of 68% equities 10 years before the target date at which time equities will be 50%.

However, the shifts do not necessarily have to be as clearly defined as a simple change in the equity allocations. Some portfolio managers are adding a more diverse mix of assets to their portfolios by using REITS, Inflation protected securities, commodity funds and by increasing exposure overseas to both developed and emerging markets. Fidelity and Vanguard, among the leaders of 401(k) managers, have increased international exposure from 20% to 30%.

Target date funds are mutual funds that follow a predetermined glide path, which is simply a change in the broad allocations that will occur between now and the targeted date. Lincolnshire Ill. consulting firm Aon Hewitt, Who deals mainly with benefits, states that more than 80% of 401(k) plans have target date funds available.