When employees are automatically enrolled into the plan, the plan’s fiduciaries must select an appropriate Qualified Default Investment Alternative (QDIA) for participants who fail to provide direction over the investment of their individual accounts.

Global bonds seem to have become universally recognized and accepted in the world of defined benefit plans, with an allocation to them typically sought to potentially improve performance and dampen volatility. Similarly, we think global bonds are worthy of discussion as an asset class for defined contribution plans in terms of both a standalone allocation option and a component of any target date or target risk fund.