DOL Issues Guidance on Qualified Default Investment Alternatives discusses three pieces of qualified default investment alternatives (QDIA) guidance, including a correcting amendment:
This correcting amendment to those final regulations address 3 issues. First, a correction is made to the "round-trip" restriction contained in the final regulation. The DOL states that the original "round-trip" restriction was too broad and should not have been included as an example of an impermissible restriction. "Round-trip" restrictions affect a participant's ability to reinvest in the QDIA for a limited period of time. Second, the DOL is clarifying that a committee comprised primarily of employees of the plan sponsor can manage a QDIA when the plan document names that committee as a named fiduciary. Finally, DOL is changing the final regulation to provide that stable value products or funds must investment primarily in investment products that are backed by state or federally regulated financial institutions, or the principal and accrued interest on the investment products may be backed by contracts issued by such institutions.
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