Qualified Default Investment Alternative Safe Harbor (QDIA)

A plan sponsor can avoid liability for participant investment decisions by offering a “qualified default investment alternative” defined as:
- Age-based funds or models
- Risk-based funds or models
- Managed accounts
Money market type accounts allowable only for short periods – 120 days.
Employer stock is generally not permissible, except if:
- held or acquired by a pooled investment vehicle; or
- it is a matching contribution from the employer held at the direction of the participant or a managed account.
All notices to participants (initial, annual and transition) must be provided 30 days in advance and include details to include:
- an explanation that absent an affirmative investment election, a decision will be made on their behalf
- that they can direct or transfer their investments
- QDIA description
- where to get other investment information
- additional info for auto-enrolled plans