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Under the regs, a QDIA can be either a target date fund, a balanced fund or a professionally managed account. It’s important to note that the selection of one of these needs to reflect the age and income ranges of the employee population as well as the sophistication of the plan fiduciaries and availability of investment managers. Employees must also always be able to opt out of the the QDIA and self-direct their investments if they wish.

Offering a QDIA doesn’t alleviate all of the fiduciary liability a plan sponsor has, but it does eliminate their risk related to the default investment of the plan when it’s used for contributions by employees who enroll but who fail to make their own elections. A QDIA makes the idea of offering auto-enrollment more attractive, and that can drive greater plan participation and improve plan cost efficiency.

Let us know if you’d like to review this topic together or with plan sponsors. We’re happy to help.

The TRPC sales consultant in your region can be reached at the phone number or email address below

NameTitleTerritoryPhoneEmail
Scott CloudNational Sales DirectorMidwest and Northeast937-902-0513scloud@trpcweb.com
Jim BrandayVP of Sales – SoutheastSoutheast (other than NC and SC)860-305-5411jbranday@trpcweb.com
Barb MorrisRetirement Plan ConsultantNC and SC864-679-5435bmorris@trpcweb.com
David LeathersVP of Sales – NorthwestWest of the Mississippi River503-863-1336dleathers@trpcweb.com