Qualified Default Investment Alternative

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Qualified Default Investment Alternative

An investment vehicle a fund manager may use for retirement plan contributions in the absence of direction from the plan participant. A qualified default investment alternative must be diversified, may not directly consist of securities in the company for which the plan participant works, and may not penalize the participant for early withdrawal. Qualified default investment alternatives were defined in the Pension Protection Act of 2006 as part of a broader effort to ease automatic enrollment in retirement plans.
References in periodicals archive ?
One might expect, says Perdue, that "the extension of the 404(c) protection means that by defaulting a participant into an eligible QDIA, the fiduciary will not be responsible for the consequences that flow from that default.
We propose strengthening the current QDIA rules in two ways, in effect creating an Enhanced QDIA standard or EQDIA.
Two-thirds of those with stable money or money funds as a default say it's their QDIA, even though stable money and money funds are only valid QDIAs for the first 120 days after a participant enrolls.
focuses on QDIA fund selection, construction, monitoring and satisfaction.
DALBAR evaluates those aspects of ERISA Section 404(c)(5) that can reasonably be met by practices, procedures and obligations of investment managers, including the applicability of the investment to one or more types of QDIA, qualification of the manger and the investment under QDIA requirements, as well as the reasonableness of the investment with respect to fees, performance and use of generally acceptable investment theory.
The survey also revealed that plan sponsor perceptions of target date funds, as compared to other QDIA options, are shifting.
To obtain your one year no cost membership to the Custom QDIA Association and register for the CFDD '12 Advisor Conference, go to: http://www.
Department of Labor finalized the QDIA regulations as recently as October 2007, the policy is already having a positive impact on newer participants.
Offering Mainspring Managed as a QDIA is just one way we are simplifying retirement plans for our plan sponsor clients," said Dan Hall, regional sales vice president.
Of all plans at Vanguard that have designated a QDIA, 80% had chosen target-date funds as the default.
Strategic Advantage 401k provides plan design, custody, record keeping, and three levels of active investment management: core fiduciary services to reduce Plan Sponsor liability; age-based, risk-managed QDIA accounts; and custom, suitability-based managed accounts for electing participants.