Many plan sponsors have opted to re-enroll their participants in the Qualified Default Investment Alternative (usually target date funds) in their plans. Why would they do this?
Keep in mind that with all re-enrollments, participants are allowed to opt-out by choosing their own investment mix. However, studies have shown that more than 80% choose to remain in the QDIA that their assets are allocated into. Re-enrollment is another way of using participant inertia to the participants advantage and can be an important strategy in helping participants achieve retirement readiness. Contributing Editor Robert C. Lawton is President of Lawton Retirement Plan Consultants, LLC a Registered Investment Advisory firm helping retirement plan sponsors with their investment, fiduciary, employee education and compliance responsibilities. Mr. Lawton has over 25 years of experience working with corporations on their retirement plans and is a Chartered Retirement Plan Specialist (CRPS) and Accredited Investment Fiduciary (AIF). Mr. Lawton may be contacted at firstname.lastname@example.org or 414.828.4015.
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