Certified Plan Sponsor Professional (CPSP) Practice Exam

How frequently should an individually designed plan be rewritten according to the standards?

1. Every 3 years

2. Every 5 years

3. Every 6 years

4. Every 10 years

The correct answer is: Every 5 years

An individually designed plan should be rewritten every 5 years according to established standards. This requirement stems from the need to ensure that the plan remains compliant with changing laws, regulations, and best practices in retirement plan design and management. By revisiting the plan every 5 years, sponsors can assess whether the provisions, operation, and overall compliance are still aligned with the current regulatory environment and the evolving needs of employees. Additionally, this timeframe allows plan sponsors to incorporate new features or address any issues that may have arisen since the last review, thereby enhancing the plan's effectiveness and ensuring optimal employee benefits. Regular evaluations are vital for sustained compliance and alignment with the organization's objectives.