Auto-enrollment has been proven to be effective in raising participation rates in 401K plans. As a result, it's been pretty widely adopted across the country, especially in mid- to larger plans. Automatic enrollment creates a situation where many employees fail to make an investment election on their own. A QDIA is designed to meet the criteria of ERISA section 404(c) which provides plan sponsors with a safe harbor from fiduciary liability for investment decisions made by participants in their 401(k) accounts.
Know more at https://www.pentegra.com/current-thinking/fee-disclosure/401k-plan-design-automatic-features/
