Qualified Default Investment Alternative Safe Harbor Upheld

Sixth Circuit finds that plan fiduciaries did not breach their duties when participants' investments were transferred to the plan's default fund without their explicit consent.

The U.S. Court of Appeals for the Sixth Circuit affirmed that a Section 403(b) plan administrator did not breach its fiduciary duty to plan participants when it changed the plan's default investment fund and automatically transferred participants' investments to the new default fund without first receiving actual investment elections from the participants.¹ In Bidwell, the Sixth Circuit upheld the U.S. District Court for the Western District of Kentucky's April 17, 2011, decision that the Department of Labor's (DOL's) Qualified Default Investment Alternative (QDIA) safe harbor protected a plan fiduciary from liability stemming from losses suffered following a transfer of participant accounts to the plan-selected default investment vehicle, provided adequate notice and other procedural