QDIAs

[Guest JMN]

Does anyone have any thoughts regarding the use of an asset allocation model as a QDIA (under -5(e)(ii)) where the allocation chosen is appropriate for the participants as a group? Such models appear to be contemplated by the regulation, but I haven't found any guidance that specifically addresses this.

How does a fiduciary determine wehther a product or model portfolio applies "generally accepted investment theories?"

[Draper55]

how could you know if an allocation model is appropriate for all the

participants..at least with the target date funds you have geared the allocation

to their age..how homogeneous is the group and even if it is will it always be that

way??? I wouldn't use a QDIA that is not sanctioned by the DOL ..

[david rigby]

... the allocation chosen is appropriate for the participants as a group...

Huh? What does this mean?

[Guest JMN]

Point of clarification: asset allocation model is managed by professional nonfiduciary third party, and allocates defaulted participants' accounts among the plan's investment options based on their years to retirement (similar to a target date fund) and assumes a level of risk tolerance that is appropriate for all of the participants as a group.

I do not view this option as being signficantly different from a balanced fund whose asset allocation is based on the overall participant demographics. Instead of the entire asset allocation being based on the overall demographics, only the risk tolerance (a factor that is inherent in any asset allocation) is.