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Daily valuations allow for the employees account balances to be updated on a daily basis. Distributions are procesed on demand and investment pricing is current.
Under a quarterly valued plan, the last balance you would have seen would have been as of 12/31/00. During this time the NASDAQ fell 25% and the Dow was down over 8%. You would have had no idea how your investments were handling this market turmoil during this downturn.
Under a quarterly valued method, employees are generally only allowed to make changes quarterly.
One disadvantage to daily valuation is it allows employees to make changes to their account balance on a daily basis. this is not always the best thing in a long term investment such as a retirement plan.
Quarterly value is basically a thing of the past, very few plans still have this. Most have converted over the last 5 years to a daily environment as the technology and cost of daily valuation has improved.

Bill
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