One recent attempt to solve the problem of workers' paltry retirement savings–target-date funds–is showing some cracks amid the market meltdown. CFOs and other plan officials are increasingly concerned that such funds rely too heavily on stocks at a time when equity values have plummeted and that their use may expose plan sponsors to legal liability. Meanwhile, some fund companies are moving to modify the asset allocations of their target-date funds.

It comes as a blow to plan officials and employees alike that professionally managed target-date funds are not the safe havens lawmakers and experts expected they would be, given that the funds are designed to shift to a more conservative asset allocation as participants move closer to retirement and are rebalanced regularly to keep to their asset-allocation targets.

Last February, U.S. Senate Special Committee on Aging Chairman Herb Kohl (D-Wis.) unveiled findings from the committee's investigation of funds designed for people planning to retire in 2010, which revealed "a wide variety of objectives, portfolio composition and risk within same-year target-date funds." Indeed, equity allocations among 2020 funds range from 51% to 90%, according to a recent study by Boston-based consultant Financial Research Corp. (FRC).