Offering a retirement plan can help the owners of small businesses or professional practices recruit and retain good workers, and you can also use the plan to save for your own retirement. But providing a plan means taking legal responsibility for protecting your employees’ financial interests. It’s up to you, as plan fiduciary, to offer sound investments that workers can understand and that may help them achieve their retirement goals. “Target date” funds, mutual funds that adjust allocations to become more conservative as investors approach retirement, can fit the bill. Still, depending on the funds you choose, this approach may not let you completely off the hook.

A target date fund is typically designed to reach stated objectives at a specified future date. For example, if you plan on retiring in 20 years, you could invest in a fund whose asset allocation is built around that target date. Normally, the fund’s manager will adjust the mix of investments to shift the focus from growth to income as the target date nears.

However, some target date funds aren’t as simple as they appear, and some performed poorly during the stock market downturn of 2008 and 2009, prompting increased scrutiny by the U.S. Department of Labor and the Securities and Exchange Commission.

One potential problem of target date funds may be an asset allocation “glide path” toward retirement that fails to protect unsophisticated investors. (The glide path is the formula used by the fund to reduce investment risks as its target date approaches.) To assess funds you’re considering for your retirement plan, get answers to these questions.

1. How has the target date fund performed historically, and what has been the performance of the individual investments that make up the fund?
2. Which asset classes does the fund use to achieve diversification?
3. Does the glide path used by the fund end at retirement or continue beyond?
4. Who is the asset manager responsible for investing the assets in the fund, and who is supervising the manager’s performance?
5. How does the fund’s asset allocation plan compare to those of other target date funds? Is it more conservative or more aggressive?
6. Does the fund manager of the fund have discretion to deviate from the asset classes, asset allocations, and glide paths provided to retirement plan fiduciaries?
7. What are the fund’s fees, and have they been adequately disclosed and explained to fund investors?

Answering these questions can guide you in choosing funds that will help you and your employees reach your retirement goals while shielding you from legal liability.