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In an automatic investment plan, employees who do not elect an investment for their contributions are "defaulted" into an investment, or investments.

This default may be a single fund with a single investment objective (i.e. the Plan's Balanced Investment Fund) or an investment objective within a group of investments (i.e. a "Target Maturity Fund" in which a participant's investment mix is based on their current age).

A special variation of the Automatic Investment Plan establishes the default investment as "Qualified Default Investment Alternative" where the sponsor is insulated from liability from that fund choice.