Shouldn’t the answer to this question be “D”? (Since the IPS should provide “criteria for selection, termination, and replacement of investment choices”.) ======== Question ID#: 14692 Which of the following statements would be appropriate for a participant-directed defined contribution plan? A) Both are appropriate. B) Neither are appropriate. C) The plan should be responsible for establishing and revising the interest rate for plan loans to participants. D) The plan should provide criteria for manager/fund selection, termination and replacement. Your answer: D was incorrect. The correct answer was A) Both are appropriate. Instead of stating objectives and constraints (as in defined benefit plans), the purpose of a participant-directed defined contribution investment policy statement is to provide a governing document that describes the investment strategies and alternatives available to plan participants.
Completely on board that the statement found in D is correct. I tried to see why the statement in C would be correct or incorrect and couldn’t. "In a defined contribution plan, the employer: Promises contributions to be paid currently. Only financial liability is to make current contributions to the employee’s account. Plan must offer employees sufficient number of investment vehicles for suitable portfolio construction. "