About Target Date Portfolios
The Target Date Portfolios were created to simplify investing for participants by providing a “cruise-control” investment option that is efficiently diversified among different asset classes, continually monitored, and professionally managed. Each portfolio is designed for a different age group, based upon an average retirement age of 55, and average life expectancy (currently age 85), which appropriately allocates investments during the working years and the retirement years. Every portfolio contains a mix of different types of mutual funds (i.e aggressive and conservative, domestic and international), which are offered in Tier Two: Trustee-Selected Mutual Funds. The Plan’s investment consultant periodically reviews each portfolio and modifies the investment allocations so they become more conservative as the investors age.
Click here to review the age criteria, allocations, and most recent performance data for the AP-MPPP custom Target Date Portfolios.
Choosing a Target Date Portfolio
Although professionally-managed portfolios are quite common options among retirement plans, numerous studies, including a recent analysis of the City of Aurora-Police MPPP, indicate most participants do not select appropriate portfolios. These Target-Date Portfolios were designed to help employees easily select the correct option by dividing them into various age groups. Participants simply choose the portfolio that matches their age group and leave the rest to the Plan’s investment professionals.
Currently, there are seven portfolios, which are illustrated in the link above. The first three are very conservative, with smaller allocations to stocks, and are designed for participants already in retirement. The other portfolios are intended for participants that are one to forty years from retirement, and have greater allocations to stocks. To choose the proper portfolio, simply find the age group that matches your current age or the "time horizon" that matches the number of years you have left before retirement.
Participants that have retirement plans with old employers and/or outside investments are encouraged to consult with one of the Plan administrator’s (Innovest Portfolio Solutions) investment counselors, or with your own advisor.