Pension Protection Act Blog

With the deadline of November 24th to provide the Qualified Default Investment Alternatives (QDIA) Notice fast approaching, neither the Dept. of Labor nor the IRS has announced a last minute extension.

When the DOL released the Final Rule on Default Investment Alternatives Under Participant Directed Individual Account Plans on October 24, 2007, it contained six conditions for fiduciary relief for providing default investments once the fiduciary has met the general fiduciary rules applicable to the selection and monitoring of investment alternatives.

One of those six conditions is that participants and beneficiaries are provided with information concerning the investments which may be made on their behalf in the form of an initial notice and an annual notice. The initial notice is to be provided at least 30 days in advance of the first investment.

The effective date of this Final Rule is December 24, 2007. 30 days in advance of this date means the initial notice is to be provided by November 24, 2007.

The IRS issued the Sample QDIA notice last week, on November 16, 2007. Since the QDIA notice is required for more plans than just plans implementing automatic enrollment arrangements, the buzz since the DOL released the Final Rule on October 24th is that this date would be extended to a more reasonable time frame. As each day passes this week, it is becoming clear that there will probably not be an extension, and initial notices should be provided by November 24th, which is the Saturday after Thanksgiving.