Final answer:
The OCC feels that there is a high degree of risk in three areas out of the four listed, with the exception being deficient sales processes in place to grow the retirement plan services area.
Step-by-step explanation:
The OCC feels that there is a high degree of risk in three areas out of the four listed, with the exception being deficient sales processes in place to grow the retirement plan services area. Let's go through each of the options to understand why they are considered areas of operational risk for retirement plan services:
- Deficient process and controls in the monitoring of employer contributions to QRP's: This refers to the lack of proper procedures and supervision for tracking and ensuring that employers are making the required contributions to the Qualified Retirement Plans (QRPs) for their employees. Inadequate monitoring of employer contributions can lead to financial losses for employees and legal implications for the retirement plan service provider.
- Tax withholding and reporting to the IRS for distributions from QRP's: This highlights the risk associated with incorrect or incomplete tax withholding and reporting for distributions from QRPs. Failure to comply with IRS regulations can result in penalties and legal consequences for both the retirement plan service provider and the plan participants.
- Failure to provide all of the services and requirements stated in the fee arrangements: This signifies the risk of not meeting the obligations outlined in the fee agreements between the retirement plan service provider and the plan participants. Failing to provide all the promised services and requirements can lead to dissatisfaction among participants and potential legal disputes.