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Article: Plan sponsors embrace default investment alternatives; Ahead of final DOL regs, a shift to separates or target date funds.(News)
- Article from:
- Investment News
- Article date:
- July 23, 2007
CopyrightCOPYRIGHT 2007 Crain Communications, Inc. This material is published under license from the publisher through the Gale Group, Farmington Hills, Michigan. All inquiries regarding rights should be directed to the Gale Group. (Hide copyright information)
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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 ...