Certified Plan Sponsor Professional (CPSP) Practice Exam

What is a bundled arrangement in the context of recordkeeping and administration services?

1. Services provided by multiple providers

2. All services provided by a single investment provider

3. Only investment advisory services

4. A method of service evaluation

The correct answer is: All services provided by a single investment provider

A bundled arrangement refers to a situation where all recordkeeping and administrative services are provided by a single investment provider. This setup typically streamlines the management of retirement plans, as the provider takes on multiple roles, including plan administration, recordkeeping, and sometimes investment management. By consolidating these services under one provider, plan sponsors can achieve greater efficiency, reduce potential communication issues between multiple service providers, and often have a single point of contact for addressing any service-related inquiries or issues. This contrast with a situation where services might be unbundled, meaning they are sourced from multiple providers, which can introduce complexity and hinder coordination. The other options either narrow the definition or misrepresent the concept of bundled arrangements. Option B accurately captures the essence of what a bundled arrangement entails within the context of recordkeeping and administration services.