Retirement  >  The QDIA (R)evolution

The QDIA (R)evolution

By Diane Gallagher - June 28, 2017

You don't have to look very far to see why Qualified Default Investment Alternatives (QDIAs) are important to retirement plan sponsors and participants—their advisors too.

Plan Sponsor Protections; Better Results for Participant

Stricter regulations, economic downturns, and increased legal activity have motivated many plan sponsors and advisors to increase their fiduciary protection through QDIAs. In addition, more participants are finding QDIAs to be a convenient investment choice for retirement, mostly in the form of target-date investments.

When QDIA rules—set by the Department of Labor (DOL)—are satisfied, it can ease the burden for plan fiduciaries who may no longer be liable for losses sustained by participants. Participants, in turn, get diversified investments for retirement, and a potentially smoother ride in reaching their goal. Retirement plan design has also been affected, with plans implementing more automatic features to enhance participant outcomes.

History Tells the Story

Knowing the history of QDIA rules can help advisors and plan sponsors understand the rapid growth of target-date investments and changes in plan design. It also helps you understand why the selection process is vital to the success of a retirement plan.

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Diane Gallagher
Diane Gallagher

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      The opinions expressed are those of American Century Investments (or the portfolio manager) and are no guarantee of the future performance of any American Century Investments' portfolio. 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.