Which of the following best describes a Qualified Default Investment Alternative (QDIA)?

A Qualified Default Investment Alternative (QDIA) is designed to protect participants in a retirement plan who fail to make an investment choice for their contributions. This type of investment is automatically selected for these individuals and is intended to serve as a default option that aligns with their long-term retirement savings goals while adhering to regulations set forth under the Employee Retirement Income Security Act (ERISA).

The main attributes of a QDIA include being diversified, having a long-term growth focus, and being suitable for participants who may not have the expertise or willingness to actively manage their investments. Common types of QDIAs include target-date funds, balanced funds, or managed accounts. By utilizing a QDIA, plan sponsors can help ensure that participants' contributions are invested in a prudent manner, reducing the risk of participants facing poor investment outcomes due to inaction.

The other options do not accurately capture the essence of QDIAs. For instance, an investment with unlimited risks, a high-risk investment option, or an alternative requiring participant selection would not align with the protective intent behind Qualified Default Investment Alternatives. QDIAs are designed specifically to be a safer, more controlled environment for those who might otherwise leave their funds uninvested. This makes option A the most fitting description of