Certified Plan Sponsor Professional (CPSP) Practice Exam

What type of fiduciary responsibility exists when dealing with missing participants?

1. Non-traditional fiduciary duty

2. Limited fiduciary obligation

3. Full fiduciary duty to locate

4. Advisory fiduciary duty only

The correct answer is: Full fiduciary duty to locate

In the context of dealing with missing participants, a full fiduciary duty to locate them is paramount. This responsibility stems from the broader obligation that fiduciaries have to act in the best interest of plan participants and beneficiaries. A full fiduciary duty implies that the plan sponsor or fiduciary must take all reasonable steps to locate missing participants, as failing to do so could result in significant harm to the participants and their benefits. This duty includes conducting searches using available resources and tools, such as contacting relatives, using electronic databases, or working with third-party services that specialize in locating missing individuals. The rationale behind this high level of responsibility is to ensure that all participants have access to their benefits and that the plan remains compliant with the regulations set forth by the Employee Retirement Income Security Act (ERISA). Other options like non-traditional fiduciary duty or limited fiduciary obligation do not accurately reflect the legal standards and responsibilities mandated for fiduciaries in this particular situation. A fiduciary’s duty isn’t merely advisory; rather, it requires proactive measures to protect the interests of participants, making the full fiduciary duty to locate the most appropriate characterization.