SEC Proposes Target-Date Fund Disclosure Rules

Simply requiring investment managers to add warnings to prospectuses and related documents is not enough, because "investors in target-date funds are, almost by definition, not active market observers or researchers," Schapiro said. "The best place to reach them is through marketing and advertising materials."

The tag line could help give important information to investors who would be overwhelmed by more complicated financial information, Schapiro said.

The proposal would let companies put ranges such as "40-45% in equity" in the tag lines.

"I am particularly interested in public comment on whether such ranges are appropriate, or whether they should be constricted in order to foster investor understanding," Schapiro said.

The proposals also would require target-date fund marketing materials to include a visual depiction — such as a table, chart, or graph — showing a fund's glide path over time, and they would require target-date fund marketing materials to include a statement of the fund's asset allocation at the "landing point," or participants' anticipated retirement date.