Qualified Default Investment Alternatives (QDIAs) are the risk management go-to for plan sponsors and a convenient way for plan participants to get a well-diversified investment vehicle to save for retirement. But choosing one takes thoughtful consideration. How can advisors help their plan sponsor clients fulfill one of their most important duties?
Properly selecting a QDIA is the cornerstone for complying with Department of Labor (DOL) rules, and a critical way to help increase fiduciary protection. In conjunction with Jason Roberts, nationally-recognized ERISA attorney of the Retirement Law Group, we developed an easy-to-follow process to help clients in QDIA selection.
The five steps walk you through a review of the current default fund, research options and QDIA selection, followed by implementation and oversight. This step-by-step guide covers the major milestones—including key considerations for each stage.
Use the five-step process below when selecting an investment that meets QDIA rules.
Determine if the process used to select your plan’s current default meets QDIA guidance.
2. Research and Evaluate
Collect data on available providers and QDIA types to determine the best match
for your plan and participants.
Choose the most appropriate investment to serve as your plan’s QDIA based on specific, pre-determined criteria.
Choose an implementation method that best serves the needs of your plan and your participants.
Document changing needs or demographics, confirm satisfaction of relevant criteria, and periodically re-evaluate QDIA selection process.
Get the QDIA Selection Kit
Advisors: Get more information about the QDIA Selection Process and how you can help your plan sponsor clients.
The opinions expressed are those of Diane Gallagher and are no guarantee of the future performance of any American Century Investments fund.
This material has been prepared for educational purposes only. It is not intended to provide, and should not be relied upon for, investment, accounting, legal or tax advice.