QDIA notice

Qualified default investment alternatives (QDIAs) can relieve employers from fiduciary liability of participant losses in default investments.

The sample notice includes a description of the QDIA and outlines participants’ rights.

QDIAs

A default investment is needed whenever a participant has the opportunity to select his or her own retirement plan investment elections but does not do so. When this occurs, contributions or assets can be directed into a default investment. A default is also needed when participants don’t select investments for nonelective contributions or rollovers into the plan.

What investments are QDIAs?

The Department of Labor identifies three general types of QDIAs that provide growth potential and are considered long-term QDIAs:

  1. Target date (or lifecycle) funds
  2. Balanced funds
  3. Professionally managed accounts

Participants must be notified

To qualify for fiduciary relief, you’ll need to notify eligible participants and beneficiaries about the plan’s default investment. The notification should include a description of the QDIA and should outline participants’ rights with regard to the investment.

Notification needs to be given:

  • Initially, when the investment is first designated as a QDIA — At least 30 days before the first contribution is made
  • Individually to newly eligible participants — At least 30 days before their contributions are first directed into the QDIA
  • Annually — At least 30 days before the beginning of the plan year to all affected participants

Find out more

For more information, refer to our sample QDIA notice or contact your Retirement Plan Coordinator, who can also help you check if your plan’s current default (or defaults) is a QDIA.

Learn more about delivering this information electronically.

For general information about QDIAs, visit the IRS website.

Investments are not FDIC-insured, nor are they deposits of or guaranteed by a bank or any other entity, so they may lose value.
Investors should carefully consider investment objectives, risks, charges and expenses. This and other important information is contained in the fund prospectuses and summary prospectuses, which can be obtained from a financial professional and should be read carefully before investing.
Although target date portfolios are managed for investors on a projected retirement date time frame, the allocation strategy does not guarantee that investors' retirement goals will be met.
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