Certified Plan Sponsor Professional (CPSP) Practice Exam

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Prepare for the Certified Plan Sponsor Professional Exam. Use flashcards and multiple choice questions with full explanations. Achieve exam success!

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Is it recommended to periodically review the performance of service providers?

No, it is not necessary
Yes, to ensure they meet agreed services
Only during plan audits
Yes, but only once every five years

The correct answer is: Yes, to ensure they meet agreed services

Periodic review of the performance of service providers is essential to ensure that they meet the agreed-upon services and continue to fulfill their obligations effectively. Service providers play a critical role in the overall functioning of retirement plans and can significantly impact plan participants' experiences and outcomes. By regularly evaluating their performance, plan sponsors can identify any gaps in service, compliance issues, or areas for improvement, allowing for proactive management of the service relationship. Additionally, regular performance reviews can provide insights into market competitiveness, helping plan sponsors make informed decisions about retention or the need for changing providers. Such evaluations strengthen accountability and ensure that the services rendered align with the strategic goals of the retirement plan, ultimately benefiting participants and maintaining a high standard of operation.