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Compliance September 23, 2025
DOL Clears AllianceBernstein Lifetime Income Strategy for Use as QDIA
The advisory opinion could lead to greater adoption of annuity products.
Reported by James Van Bramer
Art by Alex Eben Meyer
The U.S. Department of Labor issued an advisory opinion on Tuesday affirming that AllianceBernstein L.P.’s Lifetime Income Strategy meets the criteria to be classified as a qualified default investment alternative under the Employee Retirement Income Security Act.
This classification enables plan participants to be automatically enrolled in the guaranteed income investment strategy. Annuity products, such as guaranteed lifetime income, are designed to provide a consistent stream of retirement income for participants. By investing in the annuity, participants gain protection against investment losses and the risk of depleting their funds during retirement.
AB’s LIS incorporates a guaranteed lifetime withdrawal benefit by allocating funds to a secure income portfolio. The variable annuity contract is offered to participants when they reach age 50.
Quarterly, insurers bid to become the providers of lifetime income guarantees. Then, AB allocates the participants’ assets across insurers, to diversify risk while maximizing the income insured.
The DOL’s Opinion
The advisory opinion also provided guidance on fiduciary duties under ERISA, noting that AB, acting as an investment manager, is responsible for selecting insurers and monitoring their ability to provide guarantees. The DOL emphasized that fiduciaries could rely on either the 2008 regulatory safe harbor or the 2019 statutory safe harbor when choosing annuity providers, provided they meet the conditions of those frameworks.
While plan sponsors remain responsible for prudently selecting and monitoring AB as an investment manager, the opinion clarified that plan sponsors would not be liable for AB’s actions if those duties are discharged properly, except in cases of co-fiduciary liability.
The DOL highlighted that its QDIA regulation was designed to be flexible enough to accommodate innovations in retirement products. The agency reiterated that features such as annuity purchase rights, death benefit guarantees or investment guarantees do not disqualify an investment option from QDIA status when regulatory conditions are met.
Many in the retirement investment community argue that annuity products are essential for the decumulation phase of retirement.
While many retirement experts praise annuities, the products tend to have high fees and restrict participants’ access to their assets.
