Changing Plan Providers: Moving Participant Investments

Once you’ve made the decision as plan sponsor and fiduciaries to move your organization’s retirement plan to a new recordkeeper, one of the following questions becomes what to do with participant investments.

It’s very likely that the plan will have a new investment lineup when it moves to the new provider. As fiduciaries, you are tasked with making decisions regarding that new menu. Not only will you need to understand and decide upon the new investment lineup, you will also need to determine what should happen with individual employee investment allocations.

In other words, throughout the recent years, your employees have chosen their investment allocations within their accounts, but what will happen when the plan moves to the new provider with a new investment menu? Your employees should be able to chose their own allocations within the new menu, and many will. But for those that don’t, what will happen?

Ultimately, you as plan sponsor and fiduciary are responsible – and thus potentially liable – for participant investing, even when the plan has delegated that ability to participants, and the participants have directed the investments. In fact, many admit they aren’t confident in their investment knowledge and don’t even want to make these decisions, so they rely on you. Thus, it is in your best interest to understand the best practices for fund transitions.

Fund-to-Fund Mapping

With fun-to-fund mapping, monies invested in funds of a certain asset class with the current provider are mapped to the new fund of the same or similar asset class with the new provider.


QDIA Defaulting (Re-enrollment)

With QDIA Defaulting, or Re-enrollment to the QDIA, employees are given a window of time to make their investment elections before the plan converts to the new recordkeeper. If they do not make any elections, their balances are invested in the QDIA, which is typically a suite of target date funds or some other age- or risk- based allocation model.



All variables should be weighed as plan sponsor to determine which option makes the most sense for your employees, but choosing the path that would guide them toward more successful retirement outcomes should be the preferred route.


¹ “Using Re-enrollment to Improve Participant Investing and Provide Fiduciary Protections” White Paper by J.P. Morgan.
² J.P. Morgan Plan Participant Research 2016
Securities and investment advisory services are offered solely through registered representatives and investment advisor representatives of Ameritas Investment Corp. (AIC), a registered Broker/Dealer, Member FINRA/SIPC and a registered investment advisor. AIC is not affiliated with Summit Group of Virginia LLP. Additional products and services may be available through Summit Group of Virginia LLP that are not offered through AIC. Representatives of AIC do not provide tax or legal advice. Please consult your tax advisor or attorney regarding your situation.

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