Federal regulators on Wednesday proposed new disclosure rules for target-date retirement funds that would require sponsors to spell out how they are investing the money and to warn about risks.

The Securities and Exchange Commission voted 5-0 to propose that marketing materials for target-date funds include how investments are being allocated among stocks, bonds, cash and such.

The proposed rules could be formally adopted sometime after a 60-day public comment period, possibly with changes.

Target-date funds, which are pegged to a person's expected retirement year, are an increasingly popular way to invest in 401(k) accounts. They are appealing because of their "set-it-and-forget-it" approach. Usually named for the year the investor expects to retire, the funds now command a total of about $270 billion in assets.

The funds allocate investments among various types of assets, shifting to a more conservative mix as the target date for retirement approaches. The shift is called the fund's "glide path."

The funds drew criticism in the market meltdown of 2008 for wide variations in their returns, and excessive risks and high fees for some funds.

Under the proposal, target-date funds' marketing materials, whether electronic or in print, would have to include a prominent table, chart or graph showing the allocations among the various assets over the life of the fund. A statement would have to explain that the asset allocation changes over time.

The marketing materials also would have to include a statement telling prospective investors that they should consider their financial situation and tolerance for risk before going into a fund, and that it is possible to lose money investing in the fund, including at and after the target date.

"It's clear that investors need more information than just the date in a fund's name," SEC Chairman Mary Schapiro said before the vote.

The government has designated the funds as a qualified "default" investment option. That means employers are protected from liability when they invest a worker's contributions in a target-date fund if the worker hasn't chosen otherwise.

Target-date funds came under criticism during the market meltdown of 2008 and in its aftermath. Among 31 funds with a 2010 target date, the average loss in 2008 was nearly 25 percent. Returns for those funds varied widely: from minus 3.6 percent to minus 41 percent. Some had half or more of the assets allocated to stocks, only two years from the retirement target.

The funds have mostly recovered their losses since then. However, returns have continued to range widely, according to the SEC, from 7 percent to 31 percent last year for 2010 target funds — with an average return of around 22 percent.

A Senate investigation raised the question of whether some funds charged unreasonable fees and carried excessive risk. Several major fund companies have made changes in response to the criticism, cutting fees for their target date funds and making asset mixes more conservative sooner.