DOL Issues Advisory Opinion Regarding Lifetime Income Solutions as a QDIA

The Department of Labor (DOL) has issued Advisory Opinion 2025-04A, addressing how a lifetime income investment may satisfy the requirements to be a qualified default investment alternative (QDIA) in a defined contribution plan under the Employee Retirement Income Security Act (ERISA). The advisory opinion concludes that the Lifetime Income Strategy program offered by AllianceBernstein L.P.—which includes lifetime withdrawal benefits providing a guaranteed income stream in retirement—meets the requirements to be a QDIA under ERISA. The guidance further elaborates that when final QDIA regulations were issued, the discussion regarding variable annuity contracts related to target date funds and balanced funds was clarifying, and not meant to preclude applicability to managed accounts.

Additionally, the advisory opinion confirms that once the plan’s named fiduciary appropriately discharges its selection and monitoring duties for selecting an annuity provider under either one of two ERISA safe harbors, the fiduciary will not be liable for acts or omissions of the investment manager (apart from any potential co-fiduciary liability under ERISA 405(a). In a press release, DOL reports that the advisory opinion follows President Trump’s Executive Order 14330, “Democratizing Access to Alternative Assets for 401(k) Investors,” which directed the department to reexamine its guidance regarding fiduciary duties under ERISA in connection with making asset allocation funds that include alternative asset investments available to participants.