01.07.25

TIAA Institute Recognizes Research on the Rise of Target Date Funds and the Impact on Markets

Academics from the Massachusetts Institute of Technology (MIT) and Brandeis University examine target datefund trading activity and the impact on market volatility and individual retirement savers.

 

NEW YORK (January 7, 2025) – Jonathan A. Parker, Antoinette Schoar, and Yang Sun have been honored withthe 29th annual Paul A. Samuelson Award by the TIAA Institute for their study, “Retail Financial Innovation andStock Market Dynamics: The Case of Target Date Funds.” The research analyzes the market impact of TargetDate Funds (TDFs), one of the most significant financial innovations widely used by individual retirement saversin America.

The study shows that the rules guiding trades by TDFs as they rebalance have caused substantial changes inhow money moves in and out of mutual funds, suggesting these changes are affecting stock returns and mighteven be reducing volatility in the stock market.

“TIAA has a long history of advocating for secure and dignified retirements,” said Surya Kolluri, head of the TIAAInstitute. “This research shows how TDFs can help support long-term retirement goals by appropriately adjustingasset allocations over time and by bringing greater market stability. We’re proud to recognize research that offersthese types of best practices for improving retirement outcomes.”

“It’s a unique honor to receive the Samuelson Award. This recognition highlights the real-world impact thatacademic work has on optimal portfolios – similar to the research Samuelson conducted in 1969 – andunderscores the importance of retirement plan design and financial tools,” the authors said.

Named in honor of the Nobel Prize winner and former CREF trustee, the Paul A. Samuelson Award is presentedannually by the TIAA Institute to recognize an outstanding research publication designed to increase Americans’lifelong financial well-being. Winners are chosen by an independent panel of judges, consisting of InstituteFellows and previous award recipients.

The 2024 Samuelson Award panel of distinguished judges include:

  • Scott Cederburg, The University of Arizona
  • Jonathan Reuter, Boston College
  • Sita Nataraj Slavov, George Mason University
  • Carly Urban, Montana State University
  • Stijn Van Nieuwerburgh, Columbia University

Learn more about the TIAA Paul A. Samuelson Award here.

About the TIAA

Institute The TIAA Institute helps advance the ways individuals and institutions plan for financial security andorganizational effectiveness. The Institute conducts in-depth research, provides access to a network of thoughtleaders, and enables those it serves to anticipate trends, plan future strategies and maximize opportunities forsuccess. To learn more about our work and engage with our community of thought leaders, visit tiaainstitute.organd follow us on X at @TIAAInstitute.

About TIAA

TIAA is a leading provider of secure retirements and outcome-focused investment solutions to millions of peopleand thousands of institutionsi. It is the #1 not-for-profit retirement market provider1, paid more than $5.7 billion inlifetime income to retired clients in 2023 and has $1.4 trillion in assets under management (as of 9/30/2024).ii

Press contact

TIAA Media Team
888-200-4062
media@tiaa.org

1As of June 3, 2024. Based on data in PLANSPONSOR's 2024 DC Recordkeeping Survey, #1 by total 403(b) assetsand #1 by 403(b) ERISA plans.

2As of September 30, 2024, assets under management across Nuveen Investments affiliates and TIAA investmentmanagement teams are $1,400 billion.

This material is for informational or educational purposes only and is not fiduciary investment advice, or asecurities, investment strategy, or insurance product recommendation. This material does not consider anindividual’s own objectives or circumstances which should be the basis of any investment decision.

As with all mutual funds, the principal value of a target date fund isn’t guaranteed at any time, including at thetarget date, and will fluctuate with market changes. The target date approximates when investors may plan tostart making withdrawals. However, you are not required to withdraw the funds at that target date. After the targetdate has been reached, some of your money may be merged into a fund with a more stable asset allocation.

Target date funds share the risks associated with the types of securities held by each of the underlying funds inwhich they invest. In addition to the fees and expenses associated with the target date funds, there is exposure tothe fees and expenses associated with the underlying mutual funds.

You should consider the investment objectives, risks, charges and expenses carefully before investing.Please call 877-518-9161 or go to www.TIAA.org/prospectuses for current product and fund prospectusesthat contain this and other information. Please read the prospectuses carefully before investing.

TIAA-CREF Individual & Institutional Services, LLC, Member FINRA, distributes securities products. Annuitycontracts and certificates are issued by Teachers Insurance and Annuity Association of America (TIAA) andCollege Retirement Equities Fund (CREF), New York, NY. Each is solely responsible for its own financialcondition and contractual obligations.

TIAA Institute is a division of Teachers Insurance and Annuity Association of America (TIAA), New York, NY

©2025 Teachers Insurance and Annuity Association of America-College Retirement Equities Fund, New York,NY.