Which of the following is a potential area of operational risk in retirement plan services?

Operational risk in retirement plan services involves various factors that can lead to disruptions or failures in the smooth functioning of retirement plans. In this context, inadequate service provider training stands out as a key area of concern.

When service providers lack proper training, it can lead to mistakes in the execution of their duties, which may include handling participant inquiries, processing transactions, or managing the plan's assets. This can result in errors that could affect participants' accounts and their understanding of the plan's offerings. Inadequate training can compromise compliance with regulatory requirements, which is critical in retirement plan management. If the service providers do not fully grasp their responsibilities, it might also impede their ability to manage risks effectively, heightening the overall operational risk of the service provided.

The other areas mentioned—timely reporting to employees, defective technology systems, and employee education program effectiveness—while significant, do not address a root cause of operational risk in the same immediate manner as inadequate service provider training does. Timeliness in reporting, for example, primarily relates to processes rather than the foundational expertise of the personnel executing those processes. Each of those aspects is important, but they might contribute more towards specific operational failures rather than the broader, more systemic risk introduced by a lack of competence and