The Solution for Qualified Default Investment Option (QDIA):

  • The Pension Protection Act of 2006 set forth regulations stipulating plan sponsors who act as fiduciaries must act solely in the interest of plan participants and beneficiaries, in accordance with plan documents, act with prudence, and offer a diversified set of investment options with reasonable fees.
  • Plan sponsors utilizing a set of default plan options, with reasonable fees, create a safe harbor to default participants into an investment offering that fits the participants risk profile and fulfill a key fiduciary responsibility.
  • Since this time target-date solutions have become the predominant solution chosen by plan sponsors. The ability to provide a diversity of age appropriate investments with low expense ratios while avoiding the excessive fees of professionally managed accounts, make them a perfect fit for plan default options.

Trademark’s series of target-date funds not only meet the key criteria of this definition, but they do so with a risk-managed overlay approach that adds an additional layer of protection not contemplated by other providers. 


129 CFR §2550.404c-5(e) In addition to these three QDIAs, a plan sponsor may also invest a participant’s contributions in a capital preservation fund—a fund designed to preserve principal and provide a reasonable rate of return—for the first 120 days of participation. The final QDIA regulation was promulgated in 2007.


 

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