Qualified Default Investment Alternative (QDIA)
Where contributions go when a participant makes no choice.
What is Qualified Default Investment Alternative (QDIA)?
A plan that automatically invests non-electing participants' money in a QDIA receives fiduciary protection for that choice. Permitted QDIAs are target-date (life-cycle) funds, balanced funds, and professionally managed accounts. A capital-preservation fund qualifies only for the first 120 days.
Qualified Default Investment Alternative (QDIA): a worked example
Auto-enrolled employees who never pick a fund are placed in the plan's 2055 target-date fund.
More terms in Retirement Plans, Accounts & Trading
IRA Rollovers vs. Transfers
60-day rollovers are limited to one a year; direct transfers are unlimited.
10% Early Withdrawal Penalty & Exceptions
Distributions before 59 1/2 cost 10% extra, unless an exception applies.
Solo 401(k)
A 401(k) for a self-employed owner with no employees other than a spouse.
Defined Benefit Plan
A pension promising a specific benefit; the employer bears the investment risk.
Defined Contribution Plan
An individual account plan whose payout depends on contributions and returns.
403(b) Plan
A salary-deferral plan for public schools and 501(c)(3) nonprofits.
457 Plan
Deferred compensation for state and local government employees.
SIMPLE IRA
A low-cost plan for employers with 100 or fewer employees.
All Retirement Plans, Accounts & Trading terms · Full glossary