COLLECTED WISDOM™ on Qualified Default Investment Alternative
Many Sponsors Evaluating the Key Aspects of Their QDIAs - Summary: At its most basic level, a QDIA evaluation should jibe with everything in a plan's investment policy statement. Yet, there are elements to a QDIA, because you are defaulting people into it, that are different. Here are five key aspects of a QDIA analysis.
Source: Plansponsor.com, August 2011.
Selecting a QDIA is a Fiduciary Decision - Summary: Since the Pension Protection Act of 2006 and the associated Qualified Default Investment Alternative (QDIA) Regulation were passed, many plan sponsors have added a QDIA option to their plans. Of the three choices for options, 1) age-based (target-date funds - TDFs), 2) risk-based (balanced funds), and 3) managed accounts, TDFs are the most popular to date by far. TDFs remain a work-in-progress and are but one of three choices for a QDIA. Making that choice is clearly a fiduciary decision and plan sponsors need to treat it as such.
Source: Fi360.com, June 2011.
ASPPA Comments on Proposed QDIA Amendments - Summary: ASPPA filed these comments with Department of Labor with respect to its proposed amendments to the qualified default investment alternative and the participant-level disclosure regulations for target-date funds.
Source: ASPPA 
, January 2011.
ERIC Urges Balance on Proposed Target-Date Fund and QDIA Disclosure Requirements - Summary: The ERISA Industry Committee today submitted comments to the Department of Labor's Employee Benefits Security Administration on proposed regulations concerning disclosure requirements for qualified default investment alternatives (QDIAs) and target-date funds (TDFs).
Source: 401khelpcenter.com, January 2011.
Investment Policy Statements and QDIAs - Summary: Many investment policy statements either don't have provisions for qualified default investment alternatives or, if there are provisions, have inadequate descriptions of the selection and monitoring process. While the law does not contain specific rules about the issues that plan sponsors should evaluate in selecting and monitoring target date funds, the points addressed in this article are a good starting place.
Source: Drinker Biddle & Reath LLP, April 2010.
QDIA Notice Rules - Summary: Since issuing the final regulations detailing the QDIA notice requirements the DOL has published additional guidance. This article will outline the final QDIA notice rules, and additional guidance, and also provide links to related QDIA information.
Source: McKay Hochman, November 2009.
Improving Plan Diversification Through Reenrollment in a QDIA - Summary: This paper examines the legal and practical considerations plan sponsors should address when deciding whether to reenroll participants into a qualified default investment alternative (QDIA), such as a target-date fund.
Source: Vanguard Strategic Retirement Consulting , October 2008.
DOL Field Assistance Bulletin No. 2008-03 - Summary: Since publication of the QDIA regulation, a number of issues have been raised concerning the scope and meaning of various provisions of the QDIA regulation. This Bulletin is intended to supplement the QDIA regulation by providing guidance, in a question and answer format, on a number of the most frequently asked questions.
Source: U.S. Department of Labor, April 2008.
DOL Issues Technical Corrections to QDIA Regulation - Summary: The technical corrections affect three areas of the final regulation on QDIAs. These include changes clarifying the preamble example on "round-trip restrictions," expanding the scope of who can manage a QDIA to include a committee that is a named fiduciary of the plan, and correcting the "grandfather" relief for stable value funds.
Source: U.S. Department of Labor , April 2008.
DOL Finalizes Qualified Default Investment Alternative Regulation - Summary: The safe harbor generally allows three types of QDIAs: life-cycle or targeted-retirement-date funds, balanced funds and professionally managed accounts. The final regulation took effect December 24, 2007.
Source: Watson Wyatt Worldwide, January 2008.
A QDIA Decision Tree - Summary: This decision tgree is for DC plans that allow participants to direct investments. It has been designed to help plan sponsors navigate the action that may be needed in response to the DOL QDIA regulations.
Source: Prudential Retirement , November 2007.
Final Rules on Default Investments - Summary: Plan sponsors should review these rules to determine whether a change to the plan’s default investment is prudent. Plan sponsors are not required to comply with these rules, but may choose to comply to receive the additional fiduciary protection offered by the safe harbor.
Source: Prudential Retirement , November 2007.
Regulations on Fiduciary Safe Harbor for QDIA - Summary: The DOL issued its final regulations implementing the fiduciary safe harbor for default investments, which was added to ERISA by the Pension Protection Act of 2006. The final regulations, published on October 24, 2007, finalize the proposed regulations released September 27, 2006 and consider the more than 120 public comments sent to the DOL.
Source: Reinhart Boerner Van Deuren , November 2007.
DOL Issues Final Default Investment Alternative Regulations - Summary: The DOL ultimately decided not to include stable value type funds as QDIAs. The DOL stated that investments made on behalf of participants who fail to provide investment direction ought to be long-term investments. This article also reviews other aspects of the regulations.
Source: Dechert LLP , November 2007.
DOL Issues Final Regulations on QDIAs - Summary: Although the final regulations contain substantially similar conditions and requirements as set out in the proposed regulations, sponsors and fiduciaries should review their policies and procedures to ensure that they meet all of the requirements, particularly with respect to capital preservation products.
Source: Pillsbury Winthrop Shaw Pittman LLP , November 2007.
DOL Issues Long-Awaited Guidance on DC Plan Default Investments - Summary: After much delay, the Department of Labor has issued final regulations setting forth the conditions for fiduciary relief when plan assets are invested in a qualified default investment alternative (QDIA) in the absence of participant direction.
Source: Drinker Biddle, November 2007.
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