* Clearly define goals and objectives: A basic step that can have critical ramifications, as the report points out. For instance, if the 401(k) plan is to serve as the sole retirement vehicle for most participants, it probably makes sense to consider a more conservative TDF as the default option.

* Match the TDF to the participant group: For instance, TDFs with lower equity allocations may be better suited to companies with higher levels of turnover. That way, employees who leave face less risk of loss, should they cash out in the midst of a depressed market.

Consider your own expertise: TDFs are not static investments; instead, a fund may alter its glide path or investment strategy over time. That makes them challenging to monitor. Plan sponsors need to honestly assess their expertise and the amount of time they can devote to managing TDFs.

Target-date funds may help some employees meet their retirement savings goals. All the same, the funds aren't without their shortcomings.