Selecting a prudent qualified default investment alternative (QDIA) is one of the most critical decisions for defined contribution (DC) plans. Research shows that the majority of assets in DC plans today are invested in the QDIA, and most of those assets are invested in target-date-funds (TDF). That percentage is only expected to grow over the coming years. Given the heightened focus on the QDIA, many retirement advisors already have an established, thorough TDF selection process. However, in speaking with top advisor teams in the industry, PIMCO learned that many would benefit from more guidance on how to establish and conduct an ongoing TDF monitoring process. In fact, advisors are wise to heed the Department of Labor’s (DOL) Tips that were released in 2013 stating that DC Plans need to “establish a process for periodic review of target-date-funds.”
In this Q&A, PIMCO reveals some insights on the topic as shared by senior leaders from top retirement firms serving DC plans in the U.S. today: Chao & Co, Innovest, Lockton, SageView Advisory and USI Consulting. You can access the paper here.