Qualified
Default Investment Alternatives ("QDIAs")
The DOL has released the final
regulations on QDIAs.
It's time for your plan to take advantage of these new rules.
Your Plan's Current Default Investment Option
As you may recall, your company's retirement savings
plan has designated a default
investment option for the plan. This default investment
option is utilized when a participant elects to
make deferrals into the plan without making an
affirmative investment election as to how they
want their contributions to be invested. Similarly,
if your plan makes employer contributions, the default investment
option would also come into play for those participants who
have never made an affirmative investment election.
The New Rules
The Pension Protection Act of 2006
("PPA") included a provision that created
Qualified Default Investment Alternatives ("QDIAs").
These rules created a safe harbor for plan sponsors
with respect to fiduciary responsibility for investments
made on behalf of participants in a plan's default
investment option.
The PPA called
for the Department of Labor ("DOL") to
craft appropriate regulations defining the requirements
that must be met for plan sponsors to
be eligible for
the fiduciary relief provided by a QDIA. The DOL
has now released the final regulations governing
QDIAs, providing plan sponsors the roadmap
to take advantage of this fiduciary relief.
It's Time
to Change -- And It's Easy
Your plan's current default investment
option may not constitute
a QDIA, and hence may not provide the plan this
important protection.
Adding a QDIA to your company's plan is easy.
Including a series of Target Date Funds and designating
these funds as the QDIA for the plan is a great way to take
advantage of this fiduciary protection.
The
sooner you act, the sooner a QDIA will be working
to protect you. If you contact us by November
15, 2007, we can make the switch and send the
required notices by November 24, 2007, so that your
plan is protected on the earliest
possible date of December 24, 2007. The sooner you
act, the sooner this protection will apply to your
plan.
To take advantage of the protection that QDIAs can provide,
call us for more information.
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