401(k) Can Offer a Guaranteed Lifetime Income Product as a QDIA

Defined benefit retirement plans, such as 401(k)s, must offer a menu of investment options. If a participant does not choose an investment(s), contributions are put into a qualified default investment alternative (QDIA). The Department of Labor made it clear that a guaranteed lifetime investment option can be a QDIA. This investment option promises a guaranteed benefits payout at retirement that never fully exhausts the account; the participant cannot outlive the payouts or have insufficient funds due to poor investments. #IdeaoftheDay