The vast majority of target-date funds designed for investors with a 10-to-20-year investment horizon hold "radical levels of public equity exposure," according to one fiduciary consultant to defined contribution plans.

Marc Fandetti, the defined contribution practice leader at Meketa Investment Group, a Boston-based consultancy to retirement plans, thinks that is putting too many participants in a bad spot.

"As a result of extreme equity exposure, the largest TDFs provide little downside protection to investors," wrote Fandetti in a recent paper. TDFs effectively behave like 100 percent equity investments, he said.

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Nick Thornton

Nick Thornton is a financial writer covering retirement and health care issues for BenefitsPRO and ALM Media. He greatly enjoys learning from the vast minds in the legal, academic, advisory and money management communities when covering the retirement space. He's also written on international marketing trends, financial institution risk management, defense and energy issues, the restaurant industry in New York City, surfing, cigars, rum, travel, and fishing. When not writing, he's pushing into some land or water.