Defined terms for the annuity market and lifetime income landscape.
The prudent expert standard is the ERISA fiduciary standard of care requiring a plan fiduciary to act with the care, skill, prudence, and diligence that a prudent person familiar with the relevant matters would use — a standard elevated above ordinary prudence to that of an expert in the field.
The prudent investor rule is the general trust-law standard of care that requires a trustee to invest and manage trust assets the way a prudent investor would, judged against the overall portfolio and its purposes rather than against any single holding in isolation.
A QDIA is a category of investment option a defined contribution plan can use as the default for participants who do not affirmatively elect how contributions are invested, receiving specific fiduciary safe-harbor protection under DOL regulations when the plan meets the required conditions.
Retirement income adequacy is the sufficiency of a participant's projected income in retirement — from plan savings, Social Security, and any other sources combined — to fund an intended standard of living across an uncertain lifespan.
Retirement readiness is a participant's preparedness — measured across accumulated balance, projected income sources, expected expenses, and expected lifespan — to sustain their intended standard of living from retirement onward.
