Which obligation does the choice of a default investment option under automatic enrollment relieve employers from?

The correct answer focuses on fiduciary obligations. When a plan includes a default investment option under automatic enrollment, it is guided by a statutory provision known as the Qualified Default Investment Alternative (QDIA). This provision allows the plan sponsor to select a default investment for participants who do not actively choose their investments. As a result, the employer is relieved from some fiduciary responsibilities for the assets placed in that default option, provided the choice aligns with the criteria for QDIAs.

Choosing a suitable default investment protects the employer from liability related to investment performance and provides a framework within which they can automatically enroll employees while still adhering to fiduciary standards. This does not absolve the employer from all fiduciary obligations but rather establishes a guideline that reduces the risk of being held liable for the investment options that employees receive by default.

The other choices involve obligations that are not alleviated simply by designating a default investment option. Disclosure requirements still need to be met to inform all participants about plan features and investments, including default options. Wage compliance laws remain applicable regardless of the plan's investment choices, ensuring that employee compensation adheres to federal and state regulations. Lastly, while employing qualified financial advisors can move a fiduciary’s obligations to some extent, it is not