Certified Plan Sponsor Professional (CPSP) Practice Exam

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How often must participants in a self-directed investment plan receive benefit statements?

Quarterly
Annually
Biannually
Monthly

The correct answer is: Quarterly

Participants in a self-directed investment plan must receive benefit statements at least quarterly. This requirement is outlined in the regulations provided by the Employee Retirement Income Security Act (ERISA), which mandates that plans must provide participants with regular updates on their account balances and investment performance. Quarterly statements help participants stay informed about their investments, making it easier for them to manage their accounts and adjust their investment strategies as needed. This frequency of reporting is designed to ensure participants have timely access to important information that can affect their retirement planning. The quarterly format balances the need for up-to-date information without overwhelming participants with excessive reporting, which might occur with more frequent statements. While less frequent reporting options, such as annually or biannually, exist, they do not meet the regulatory standards for self-directed investment plans. Thus, quarterly statements are essential for enabling participants to make informed decisions regarding their retirement savings.