However, the QDIA
does little to help the plan participant manage his or her account balance after retirement, increasing the likelihood that the funds could run dry.
When re-enrolling current participants into a QDIA
, Pagliaro says, it is important to make clear that they can opt out of the change.
With TIAA's custom TDFs, participants can transfer the assets invested in the annuity sleeve to another in-plan QDIA
for the first 12 months after the initial investment.
You must describe the Plan's QDIA
, including its investment objectives, risk and return characteristics, and fees and expenses, and must describe other circumstances, f any, under which assets may be invested in the QDIA
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.
Surz said that "throwing a dart at the QDIA
dart board is not a fulfillment of fiduciary responsibility," and even though TDF providers may have products that can replace pay and manage longevity risk, not all participants have the same objectives for a fund.
But the real crucible for best-in-class DC plans is not so much plan design, in which enormous progress has been made but where the basic parameters are now accepted (auto-enrollment and auto-escalation), but in investment choices in general and QDIA
choices in particular.
It affirms that fiduciary relief under the regulations can apply to assets invested in a QDIA
before the regulations' effective date (December 24, 2007), if all conditions of the regulations are met.
Money Manager to Offer 3(38) Fiduciary Protection When Proprietary Target Date Funds are used as QDIA
Westminster supplements each committee report it writes with a QDIA
[qualified default investment alternative]-or safe harbor-checklist.
Summary paragraph: A 401(k) plan with lifetime income as the QDIA
A 2015 study by Cogent Reports found that the number of mega plans, those with $500 million or more in assets, offering managed accounts as their QDIA
increased from 5% in 2014 to 18%.