Deficiency 408(b)(2) relates to lack of proper monitoring of what?

Deficiency 408(b)(2) relates to lack of proper monitoring of what?

• A. Lack of proper monitoring of service provider fees and disclosures.
• B. Failure to enroll participants.
• C. Inadequate recordkeeping.
• D. Late filing of form 5500.

Answer: (A)

The concept here is monitoring service provider fees and disclosures required under 408(b)(2). This rule requires plan fiduciaries to obtain clear disclosures of all direct and indirect compensation from service providers and to regularly review those fees to ensure they are reasonable for the services provided. A deficiency arises when there isn’t proper oversight of what providers are charging and what they disclose, which can hide excessive or undisclosed fees and raise fiduciary concerns. The other items—enrollment, recordkeeping, and Form 5500 filing—are separate aspects of compliance and are not the focus of 408(b)(2).

The concept here is monitoring service provider fees and disclosures required under 408(b)(2). This rule requires plan fiduciaries to obtain clear disclosures of all direct and indirect compensation from service providers and to regularly review those fees to ensure they are reasonable for the services provided. A deficiency arises when there isn’t proper oversight of what providers are charging and what they disclose, which can hide excessive or undisclosed fees and raise fiduciary concerns. The other items—enrollment, recordkeeping, and Form 5500 filing—are separate aspects of compliance and are not the focus of 408(b)(2).