Target-Date Funds Raise Alarms Amid Retirement Push by Congress

Concerns are looming over the risks target-date funds pose to default retirement accounts as Congress considers legislation that would automatically enroll millions of first-time savers.

Target-date funds, often marketed as “set it and forget it” investments, don’t always live up to expectations, retirement advisers say. Assets often are stacked with riskier equities, and fees tend to be higher than those of other investment alternatives.

The funds, or TDFs, are actively managed investment vehicles that are supposed to periodically rebalance assets to optimize returns and minimize risk within a certain time frame—usually a projected retirement date. Their share of total retirement ...