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Hot Sessions & Speakers
Breakout Session
Qualified Default Investments Alternatives (QDIA's)
Thursday - 7:15 a.m. to 8:15 a.m.
Thursday - 9:35 a.m. to 10:35 a.m.
(view the spicy schedule)
The 2006 Pension Protection Act (PPA) and subsequent DOL guidance provide for two new fiduciary “safe harbor-like” procedures that relieve plan employers from liability for investment decisions associated with participant-directed 401k plans: “QDIAs” and “fiduciary advisers.”
Terrence Morgan, AIF and President of Ok401k will be providing a fun and easy to understand presentation for Oklahoma Human Resource professionals about QDIA provisions which are voluntary, but when adopted they will protect plan sponsors from liability for making investments for the participants who don’t. “QDIAs will become the dominant investment choice in 401k plans when employers take advantage of the QDIA protection and 401k investors/participants recognize the convenience of a QDIA investment choice,” says Terry Morgan, President of Ok401k. Morgan further elaborated that, "Because of QDIA's, we believe that If an employer is still using Money Market accounts, Stable Value Investments or Guaranteed Investment Accounts as the default choice on their 401k plans when no investment is selected by the employee, they are potentially opening up their company to a future law suit from a disgruntled employee that feels like he or she does not have enough saved at retirement."
In order to be protected, plan sponsors have a fiduciary duty to demonstrate that QDIAs have been prudently selected and monitored. Selecting and monitoring QDIAs present unique and more complex challenges to Oklahoma employers than traditional investment options. Undoubtedly, employers will turn to investment advisors for help. “The worst thing an employer can do is simply rely upon the default choice of the 401k plan vendor. Insurance and mutual fund companies that have their own investments inside the empoyers 401k plan will of course use their own investment as the QDIA. By allowing the 401k vendor to self select their own QDIA for your employees, will the employer be able to defend themselves as performing good due dilligence on the QDIA they are defaulting their employees money into?" Morgan believes it is important to have a selection criteria in place. Don Trone, founder of the Center for Fiduciary Studies believes in the value of having an advisor who will support the employer with a good comparison and analytical process of what QDIA investment choice will fit their employee needs. "The fiduciary duty of evaluation, selection, and monitoring of a QDIA will increase the need for trained investment advisors to handle this very complex process." Says Trone. The Foundation was founded with the mission to define and promulgate prudent practices for investment fiduciaries. The Foundation’s fiduciary practices are used extensively by Fiduciary360 (www.fi360.com) which coordinates the resources for the Center for Fiduciary Studies and Fiduciary Analytics. The Center provides training programs and awards the Accredited Investment Fiduciary® (AIF®) and Accredited Investment Fiduciary Analyst™.
About Terrence Morgan
Terrence Morgan, AIF, founder of Ok401k.com, has been in the employee benefits business since 1991. As a specialist primarily dealing with retirement plans, Terry's expertise has enabled Ok401k's clients to be on top of all 401k responsibilities. Currently, Terry has many leading employers in Oklahoma who utilizes his talents for 401(k)plan design.
