Morningstar's 2012 Industry Survey examines growth in target-date funds and the fact that they incurred steep losses in 2008. In early 2012, the Securities and Exchange Commission reopened the comment period on its recommendations for improved disclosure requirements for target-date funds, which were first proposed in 2010.

According to the Morningstar report, the SEC backed up its proposals with a survey on investor understanding of target-date funds. It found that target-date providers and plan sponsors don't do a good job of educating plan participants about these offerings.

Target-date funds have grown more than fivefold from $71 billion at the end of 2005 to about $378 billion at year-end 2011, according to the report. A recent study by Vanguard found that 82 percent of its retirement plans offered target-date funds and nearly one-fourth of participants invested only in a target-date fund. Industry experts believe that target-date funds will consume more than half of all defined contribution assets by 2020.

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