PLANSPONSOR - September/October 2024 - 32
INVESTMENTS
Frontier of the New QDIAs
S
ince the Pension Protection Act of 2006, qualified default
investment alternatives have been pivotal in guiding how
plan participants save for retirement.
Designed to provide a safe harbor for plan sponsors,
" These options really helped address plan fiduciary concerns
about the liability of undirected investment decisions, " said
Joni Tibbetts, vice president for management, retirement and
income solutions at Principal Financial Group, in Des Moines,
Iowa, speaking to PLANSPONSOR in February. " They're really
addressing plan fiduciaries' concerns about the liability of
investment losses, while providing participants [with] investments
that may lead to future growth. That's really the genesis
of why they were introduced. "
The landscape of QDIAs has expanded significantly over the
past nearly 20 years, with a proliferation of new options that offer
enhanced flexibility and potential for personalization. But with
this variety comes added complexity in selecting the best QDIA
for a plan's participants.
Under rules stemming from the PPA, a QDIA can be either
a target-date fund, a balanced fund or managed accounts. Plan
sponsors have particularly favored TDFs: According to the 2023
PLANSPONSOR Defined Contribution Survey, 73% of plan
32 PLANSPONSOR.COM September - October 2024
Art by Davide Comai
How to best navigate the alternatives, keeping participants in mind
sponsors overall use TDFs as their QDIA. These funds incrementally
shift from growth-oriented investments to more conservative
ones as the target retirement date approaches.
Even so, as George Sepsakos, a principal in Groom Law
Group, Chartered, in Washington and a PLANSPONSOR
columnist, pointed out at the 2024 PLANSPONSOR National
Conference, the sheer variety of funds available today complicates
fiduciaries' decisionmaking process. " It adds to the things
that plan fiduciaries need to think about in terms of what QDIA
or QDIAs do they actually want to offer, " he said.
Experts recommend that a plan sponsor have a comprehensive
evaluation system for QDIAs, based on each of its plans'
specific needs. Julie Varga, senior vice president and investment
product specialist at Morningstar Retirement in Chicago, also at
the conference, emphasized, " It's not about which QDIA is better
than the other, but what is best for the plan. "
An Income Stream
In recent years, hybrid annuity TDFs have emerged as a QDIA
option. These products blend the growth potential of traditional
TDFs with the security of annuities, providing a structured
retirement income solution, say their creators.
http://www.PLANSPONSOR.COM
PLANSPONSOR - September/October 2024
Table of Contents for the Digital Edition of PLANSPONSOR - September/October 2024
insights
Rules and regulations
Participant analysis
Upfront
Calls to Action
2024 PLANSPONSOR National Conference
The Intensity of Implementation
Frontier of the New QDIAs
The Great Debate
Time for a Welfare Fiduciary Checkup
Loper Bright Reshapes The Regulatory Landscape
Managing Stress in HR
PLANSPONSOR - September/October 2024 - C1
PLANSPONSOR - September/October 2024 - FC1
PLANSPONSOR - September/October 2024 - FC2
PLANSPONSOR - September/October 2024 - C2
PLANSPONSOR - September/October 2024 - 1
PLANSPONSOR - September/October 2024 - insights
PLANSPONSOR - September/October 2024 - 3
PLANSPONSOR - September/October 2024 - Rules and regulations
PLANSPONSOR - September/October 2024 - 5
PLANSPONSOR - September/October 2024 - 6
PLANSPONSOR - September/October 2024 - Participant analysis
PLANSPONSOR - September/October 2024 - Upfront
PLANSPONSOR - September/October 2024 - 9
PLANSPONSOR - September/October 2024 - 10
PLANSPONSOR - September/October 2024 - 11
PLANSPONSOR - September/October 2024 - Calls to Action
PLANSPONSOR - September/October 2024 - 13
PLANSPONSOR - September/October 2024 - 14
PLANSPONSOR - September/October 2024 - 15
PLANSPONSOR - September/October 2024 - 2024 PLANSPONSOR National Conference
PLANSPONSOR - September/October 2024 - 17
PLANSPONSOR - September/October 2024 - 18
PLANSPONSOR - September/October 2024 - 19
PLANSPONSOR - September/October 2024 - 20
PLANSPONSOR - September/October 2024 - 21
PLANSPONSOR - September/October 2024 - 22
PLANSPONSOR - September/October 2024 - 23
PLANSPONSOR - September/October 2024 - 24
PLANSPONSOR - September/October 2024 - 25
PLANSPONSOR - September/October 2024 - The Intensity of Implementation
PLANSPONSOR - September/October 2024 - 27
PLANSPONSOR - September/October 2024 - 28
PLANSPONSOR - September/October 2024 - 29
PLANSPONSOR - September/October 2024 - 30
PLANSPONSOR - September/October 2024 - 31
PLANSPONSOR - September/October 2024 - Frontier of the New QDIAs
PLANSPONSOR - September/October 2024 - 33
PLANSPONSOR - September/October 2024 - 34
PLANSPONSOR - September/October 2024 - 35
PLANSPONSOR - September/October 2024 - The Great Debate
PLANSPONSOR - September/October 2024 - 37
PLANSPONSOR - September/October 2024 - Time for a Welfare Fiduciary Checkup
PLANSPONSOR - September/October 2024 - Loper Bright Reshapes The Regulatory Landscape
PLANSPONSOR - September/October 2024 - Managing Stress in HR
PLANSPONSOR - September/October 2024 - C3
PLANSPONSOR - September/October 2024 - C4
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