As an avid reader of benefits publications and as a former plan fiduciary for retirement plans, I can't help but notice all the information being written about target-date funds recently - much of it not very complimentary.

This comes only a couple years after Congress made it easier for companies to automatically enroll new employees in 401(k) plans, clearing the way for employers to use target-date funds as the enrollment default option.

It appears there are many people upset with the negative returns that target-date funds have experienced recently (see related story).

In fact, some of these funds have lost 40% or more of their value. According to Watson Wyatt, investors in the 2010 target-date funds they analyzed had a median negative return of 31.9%, with losses varying widely depending on stock weightings in the funds.

The poor performance has led some to conjecture that many people that were planning to retire now will have to work longer, because glide paths have not been conservative enough.

Interestingly, at least from my recollection, there was little or no discussion about target-date funds prior to the current recession, even though the ground rules around these funds have not changed from the time they were first introduced. I may be wrong, but I believe the term "glide path" has only recently crept into our 401(k) vocabulary.

Frankly, I think many people viewed target-date funds as pretty boring when they were first introduced, yet felt that they served a legitimate need by providing diversification to participants who had no idea how to properly diversify or who, like me, had no interest in giving the matter much time or thought.

However, the recent underperformance of these funds has caught the eye of many stakeholders - including elected officials - and I expect the recession will spur legislative changes to make target-date funds better able to withstand future downturns.

While I do think it is a good thing to question the mechanics and value of target-date funds now that we have a better understanding of how they perform in a bad market, it's important to keep in mind is that we are going through the second-worst period in our country's financial history.

Target-date funds did not perform as well as any of us would have liked or expected, but I have a deep concern that their recent short-term performance may lead to taking a "throw out the baby with the bath water" approach.

Because the world of finance is not everyone's cup of tea, we will always have investors that need special help when it comes to investment options. I see target-date funds as that source of help. The only real challenge to target-date fund investors is selecting the appropriate target date.

After that, professional management takes over, enrolling participants in a well-diversified portfolio with a glide path to move them to a more conservative asset allocation as they near retirement. Whether the glide path used is appropriate or not can be debated ad infinitum, but the fact is that target-date funds do for participants what participants may not be able to do themselves.

Besides providing professional management oversight of the funds within a target-date fund, ensuring broad diversification and applying glide-path allocation adjustments, target-date fund fees continue to be relatively inexpensive for participants and give them more return on their investment dollar.

While it's appropriate to measure the performance of all investment vehicles, let's not beat up target-date funds too badly. Instead, let's:

* Concentrate on more important matters, like getting participants to save early and save often.

* Provide a holistic approach to retirement saving by educating employees in other important financial matters such as debt management, minimizing tax liability and spending controls.

* Communicate more, ensuring employees understand what it means to save for the long term, and provide them with a thorough understanding of the effect good and bad markets have on retirement savings.

* Make sure employees don't lose sight of the importance of being properly diversified.

* Emphasize to employees that markets move in cycles and there is hope for the future despite all the bad news that has been coming our way lately. Already, target-date funds are beginning to show some signs of recovery. U.S. News and World Report reports that, "After six consecutive quarterly losses, target-date funds finally posted a solid gain in the second quarter this year."