Workers near retirement were devastated to find that their funds had far more exposure to the market than they thought and suffered steep losses. There have been calls in Congress for greater oversight of the funds and even a suggestion that the government limit how much stock they can hold for workers about to retire. Investment companies have re-examined their target-date funds to see if they are too aggressive. And this month, the Securities and Exchange Commission and the Department of Labor will hold a joint public hearing on the funds. Despite the uproar, target-date funds remain a good option for many workers. ( What recent events have taught us, though, is that all target-date funds aren't alike even if they have similar names. The funds need better disclosures, and workers need more information on the risks and how the investments work. And investors must remember that although these funds make most of the decisions for us, we can never be too complacent or too hands-off. 'That's probably the lesson for the participant,' says Rick Meigs, president of 401(k)helpcenter.com. 'It's still their money, and they can't ignore the responsibility of monitoring the target-date fund.' Target-date funds emerged in the 1990s and became a staple in 401(k)s because they addressed a serious problem: worker inertia. Too often, employees selected a 401(k) investment, such as a conservative interest-bearing account, and then ignored it for years. With a target-date fund, all you do is choose a single fund with the date closest to your expected year of retirement and let professionals do the rest. They choose the mix of stocks, bonds and cash and automatically adjust the portfolio to be more conservative as retirement nears. The government liked the concept so much it approved target-date funds as a suitable investment when employers automatically enrolled workers in a 401(k). Three years ago, about 3 percent of 401(k) assets were in target funds, according to the Senate Special Committee on Aging. That figure is expected to reach 20 percent in 2010 and more than one-third by 2015. Today, the amount of stocks in funds with the same target date can vary widely depending on the investment company. Among 2010 funds, stock holdings range 26 percent to 64 percent, reports Morningstar Inc. And losses last year in 2010 funds varied from 9 percent to 41 percent. T. Rowe Price Associates says it re-evaluated the asset allocation of its target funds after last year's market decline. Price's target-date funds for workers more than 25 years away from retirement hold 90 percent in stocks. By the time a worker is at retirement, the fund holds 55 percent in stock, dropping to 35 percent at age 80 and 20 percent at 95 and beyond. After the review, Price didn't make any changes. A target-date fund isn't geared for people wanting to cash out their account the day they retire and, say, buy an annuity, says Jerome Clark, portfolio manager of T. Rowe Price Retirement Funds. 'Our target-date funds are designed to be a lifetime product. What we want to do is get (clients) to retirement and over the next 30 years,' he says. Clark notes that '2008 was a very dramatic bear market' and all types of investments -- not just target funds -- took a beating. One bad year, he says, won't determine the success of your retirement. Fidelity Investments and Vanguard also reviewed their target funds and left the allocations untouched. Charles Schwab, though, made changes in April to its retail target funds, including reducing the stock exposure for older investors. For instance, Schwab's 2010 target-date fund now has 43 percent in equities, down from 52 percent. 'Some investors changed their appetite for risk and, in many cases, find that they are more conservative than they actually thought they were,' explains Peter Crawford, a Schwab senior vice president. The upcoming public hearing about target-date funds will look at how asset allocations and underlying investments are selected, as well as how risks are disclosed to investors. 'I would like to see better disclosure of what the returns have been, what the various investments are, and what the risk, cost and fees are in a way that people can read them,' says Steve Weisman, a senior lecturer of financial planning at Bentley University. If you're a hands-on investor or have an adviser, you could be better off designing a portfolio tailored to your risk profile and financial goals, experts say. But for young investors or those too busy to manage their 401(k), target-date funds make sense. Do your homework, though. Once you hit 50 or so, your finances probably will be more complicated, says Pamela Hess, director of retirement research at Hewitt Associates. Review the target fund then because its one-size-fits-all allocation might no longer suit you and other investment options in the 401(k) might serve you better, she says. If you stick with the target-date fund, review it regularly to make sure it continues to meet your needs. 