Article: Plan sponsors embrace default investment alternatives; Ahead of final DOL regs, a shift to separates or target date funds.(News)

Byline: Lisa Shidler

CHICAGO - While the Department of Labor has yet to issue final regulations on default options for 401(k) plans, many companies are jumping ahead and incorporating a qualified default investment alternative into their retirement plans.

The 2006 Pension Protection Act offers plan sponsors insulation from liability. It allows them to direct employees automatically to a QDIA if the participant fails to provide an investment choice.

The department has defined a QDIA as a life cycle fund, a target date fund, a risk-based balanced fund or investment management service such as a managed account.

While some advisers and ...

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