The target date fund objective, glidepath and asset allocation are the most important elements in driving investment outcomes.

But the way plan sponsors choose to deliver or implement target date funds to participants can also have an impact on participants' savings and outcomes over time.

Three questions to ask plan sponsors about implementation:

1. Asset Class Management—Index vs. Active?

If your objective is to generate better-than-market returns, you may also wish to increase the risk profile and costs. Or, if your goal is to achieve efficient, broad-based strategic market exposure, indexing may be more appropriate for your risk profile and cost budget. If you fall in the middle, a blend of both may make more sense.

2. Glidepath Model—Strategic vs. Tactical?

Strategic glidepaths are usually based on long-term economic forecasts and may adjust accordingly over time, so they may offer a reduced risk profile.

Tactical glidepaths may also be based on strategic models, but tend to make more frequent, short-term shifts in the level of equity allocation, which can impact risk/return profiles.

3. Investment Vehicle—CTF vs. Mutual Fund?

Collective trusts can provide larger plans with a more cost-efficient way to invest in a wider range of investment options, including equity index and fixed income exposures, and specialized strategies such as commodities and real assets, while traditional mutual funds can provide greater transparency and an adequate range of exposure to both active and passive strategies.

This material does not constitute a recommendation by BlackRock, or an offer to sell, or a solicitation of any offer to buy or sell any securities, product or service. The information is not intended to provide investment advice. BlackRock does not guarantee the suitability or potential value of any particular investment.

The strategies discussed are strictly for illustrative and educational purposes and should not be construed as a recommendation to purchase or sell, or an offer to sell or a solicitation of an offer to buy any security. There is no guarantee that any strategies discussed will be effective.

Investing involves risk, including possible loss of principal.

Diversification and asset allocation may not protect against market risk or loss of principal.

The principal value of the funds is not guaranteed at any time, including at and after the target date.

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