Certified Plan Sponsor Professional (CPSP) Practice Exam

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What is the timeline for distributing a deceased participant's benefit to their beneficiary?

Immediately upon death
Within 30 days
At least as quickly as to the deceased participant
Within 90 days

The correct answer is: At least as quickly as to the deceased participant

The timeline for distributing a deceased participant's benefit to their beneficiary is 'at least as quickly as to the deceased participant.' This reflects the fiduciary responsibility plan sponsors have to ensure that beneficiaries receive their due benefits in a timely manner. Typically, benefits must be distributed efficiently, and many plans aim to process these distributions without unnecessary delays. The requirement to distribute the benefits promptly is aligned with the overall goal of ensuring that the deceased's wishes are honored, and beneficiaries are not left waiting for their entitled assets. While immediate distribution upon death might seem ideal, practical considerations such as verifying the beneficiary and processing paperwork are necessary steps that may require time. A timeline of within 30 days or 90 days could be specific to certain plans or jurisdictions but does not universally apply across all plans, making the guideline of ‘at least as quickly as to the deceased participant’ a more accurate representation of best practices in benefit distribution.