Twenty years ago, Congress transformed retirement investing by establishing a fiduciary safe harbor for qualified default investment alternatives. Now industry experts say the future belongs to personalized solutions and, potentially, new innovations.
At the “QDIA Evolution” session at the 2026 PLANSPONSOR National Conference in Nashville, Tennessee, organized by PLANADVISER’s sister publication this week, panelists from Vanguard, Capital Group and Strategic Retirement Partners agreed that the future of default investing will likely be more personalized. The speakers cautioned plan sponsors to resist change for its own sake and to remain focused on the participant outcomes they want their plans to achieve.
The discussion centered on the evolution of QDIAs, which gained widespread adoption after the Pension Protection Act of 2006 created legal protections for plan sponsors using approved default investments such as target-date funds, balanced funds and managed accounts. The law helped accelerate a transition away from stable value and money market defaults toward diversified, age-based investment strategies. TDFs have since emerged as the dominant investment vehicle in DC plans.
From TDFs to Increased Personalization
According to various reports, TDFs are estimated to comprise between 40% and 50% of defined contribution assets.
“The whole concept behind target-date funds was to take a fairly complex decision—asset allocation—out of the hands of participants,” said John Doyle, a senior retirement strategist at Capital Group. “It was built to work for the majority of participants in a plan.”
That simplicity remains one of the strongest arguments for TDFs, which continue to dominate the QDIA landscape. Technically, TDFs are professionally managed, meaning participants do not need to alter portfolios as they age to adjust their investment risk profiles. Yet panelists said pressure is building to tailor investments more closely to individuals’ circumstances.
When Phil Senderowitz, managing director of Strategic Retirement Partners, was asked if managed accounts or personalized TDFs would overtake traditional TDFs, he responded, “In the next five years, no. But over time, you’re going to see a lot more personalization.”
Senderowitz argued that advances in technology are making personalization more practical and affordable than it was when QDIAs first emerged. Rather than placing all participants of the same age into identical portfolios, newer approaches can incorporate factors such as savings rates, account balances and other participant characteristics.
Still, panelists repeatedly emphasized that personalization is not automatically superior.
“There’s this perception that when you use the word personalization, personalization must be better,” Doyle said. “The right personalization is probably going to be better. But how much data are you using, where are you getting that data, and what aren’t you getting that you might be missing?”
Private Markets?
The panel also explored whether TDFs themselves are likely to change. From private market allocations to guaranteed retirement income products and even the addition of artificial intelligence tools, panelists said plan sponsors have plenty to consider in terms of modifications to TDFs.
Brian Miller, a senior manager of multi-asset product management and strategy at Vanguard, predicted evolution, rather than disruption.
“When I think about the QDIA space over the next five to 10 years, I really think of it more as refinement, rather than reinvention,” Miller said. “Target-date funds, as they exist today, have done a really good job for investors.”
Miller said AI could eventually play a meaningful role in participant engagement and decisionmaking, but he warned against exaggerated claims of it immediately playing a major role.
“I’d be a little wary of some of those claims until we really prove them out,” he said. “It’s not going to replace things like fiduciary oversight or sound investing principles.”
Though private-market assets have featured prominently in discussions at this year’s conference, including the keynote address from Deputy Secretary of Labor Daniel Aronowitz, panelists warned plan sponsors about quickly jumping into adding allocations to alternative asset classes.
“People are waiting for track records,” Doyle said. “Don’t make [your glide path] different [just] to make it different. Make it different to make it better.”
Each panelist said plan sponsors should—when considering alternative investments or their plans’ QDIA—focus on outcomes, understand participant demographics and evaluate whether any investment is performing as intended.
“Think about your QDIA as the core of your plan,” Miller said. “For most of your participants, that’s exactly what it is.”