The Qualified Default Investment Alternative
(QDIA) provision of the Pension Protection Act of 2006 provides employers a safe harbor from fiduciary risk when selecting an investment for a participant or beneficiary who fails to elect his or her own investment.
While the introduction of Qualified Default Investment Alternatives
(QDIA) has enabled Plan Sponsors to help participants accumulate retirement savings, a new study released today by Genworth Financial at their 2008 Retirement Symposium in Washington, DC, reveals that adding guaranteed income to a QDIA can help to avert the risk of ruin for participants and help them generate even higher income levels in retirement.
The intent of the PPA is to assist 401(k) participants by protecting plan sponsors from liability for investment losses when participants don't provide investment direction for their own accounts and are defaulted into an appropriate Qualified Default Investment Alternative
Target Date Navigator' should also assist advisors and their plan sponsor clients to ensure fiduciary responsibilities are being addressed and that plans are compliant with qualified default investment alternative
Currently approved Qualified Default Investment Alternative
(QDIA) funds include Lifecycle, Target Date and Managed Accounts.
Qualified default investment alternatives
include both target date funds and target risk (aka "lifestyle") funds.
Provided the plan adheres to certain rules, companies can automatically enroll participants in qualified default investment alternatives
Because of this, the law now allows plan fiduciaries to invest funds that are not being directed by plan participants into qualified default investment alternatives
(QDIAs) that automatically make appropriate investment choices for employees based on age, lifestyles and risk.
Department of Labor permitted the use of target-date funds among the qualified default investment alternatives
used when a participant fails to make an investment election.
com/research/wqfh23/cerulli_edge_ret) has announced the addition of the "Cerulli Edge - Retirement Edition Topic: Qualified Default Investment Alternatives
(1Q 2012)" report to their offering.
Department of Labor's desire for plan sponsors to provide well-diversified Qualified Default Investment Alternatives
for defined contribution plans.
Part of the Lincoln Retirement Power research series, the survey explored plan sponsors' perspective on the value of automatic retirement plan features including automatic enrollment, automatic escalation and qualified default investment alternatives