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Kiplinger
Kiplinger
Business
Joey Solitro

Why Vanguard Was Ordered to Pay a $106 Million Fine Related to Target-Date Funds

Vanguard capital gains SEC
Vanguard signage backlit by red lights outside the company's campus in Paoli, Pennsylvania.

The Securities and Exchange Commission (SEC) announced Friday that The Vanguard Group, one of the world's biggest asset managers, will pay a $106.4 million fine to settle charges for "misleading statements related to capital gains distributions and tax consequences" for individuals that invested in its Vanguard Investor Target Retirement Funds (TRF) in taxable accounts.

The SEC found that in December 2020, Vanguard lowered the minimum investment for its lower-expense Institutional TRFs, to $5 million from $100 million. This prompted many retirement plan investors to sell shares of the Investor TRFs and switch to institutional target-date funds.

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