Investments And Plan Portfolios

The correct answer is "All of the Above" because QDIA (Qualified Default Investment Alternative) investment types can include all of the mentioned options: Target Date Retirement Funds, Balanced Funds, and Professionally Managed Funds. QDIA is a type of investment option that is automatically selected for participants in retirement plans who do not actively choose their investments. These investment types offer diversification and professional management to help individuals achieve their retirement goals.

ADP, or Automatic Data Processing, is a company that provides human resources and payroll services. In the context of this question, "defaulted participants" refers to individuals who have defaulted on their retirement plan loans. According to regulations set by the Department of Labor, ADP must give these defaulted participants an annual notice about their defaulted accounts. This notice serves to inform them about the status of their accounts, any outstanding loan balances, and the potential tax consequences of their default. Therefore, the statement "ADP must give defaulted participants an annual notice about their defaulted accounts" is true.

Mutual funds raise money by selling shares of the Fund to the public. This means that individuals can invest in a mutual fund by purchasing shares, and the money collected from these sales is used to invest in various securities such as stocks and bonds. The investors then become shareholders of the mutual fund and can benefit from the fund's performance and any dividends or capital gains generated from the investments. This is a common method for mutual funds to gather funds from a large number of investors and pool them together for investment purposes.

Mutual funds offer several benefits to investors. Diversification is one such benefit, as it allows investors to spread their investments across a wide range of assets, reducing the risk associated with investing in a single security. Professional money management is another advantage, as experienced fund managers handle the investment decisions on behalf of investors. Liquidity is also a benefit, as mutual funds can be easily bought or sold on any business day. Lastly, mutual funds generally have overall reasonable fees/value for the average investor, making them a cost-effective investment option.

The statement is true because OFA (Open Fund Architecture) allows plans to offer a range of investment options that can be changed or adjusted over time, providing flexibility to plan participants. On the other hand, plans that choose an IPS (Investment Policy Statement) rely on ADP (Automatic Data Processing) to determine, choose, and monitor the investment funds that are available to them, limiting the flexibility and control over investment options.

Target Date or Life Cycle Funds - automatically resets the asset mix (stocks, bonds, cash equivalents) in its portfolio according to a selected time frame that is appropriate for a particular investor

A Financial Advisor (FA) is a licensed individual who provides guidance and advice to both ADP Participants and Plan Administrators. This means that the FA can assist both the individuals participating in the ADP plan as well as the administrators responsible for managing and overseeing the plan. The FA's role is to provide expert advice and support to help both participants and administrators make informed financial decisions and effectively manage the ADP plan.

The Qualified Default Investment Alternative (QDIA) allows a plan to choose an alternate investment for defaulted participants, including Automatic Enrollment arrangements. It was a part of the Pension Protection Act of 2006 and provides the company with protection from defaulted participants suing them for investment losses.