What must be documented when installing a recharacterization rule in a plan?

The correct choice focuses on documenting the operational process for handling new shifts when installing a recharacterization rule in a plan. This process is vital because it outlines how the plan will manage and implement the recharacterization of contributions. Recharacterization refers to the process of changing the nature of contributions (for example, converting a traditional contribution into a Roth contribution) and requires clear guidelines on how these shifts will be applied within the plan.

Having a documented operational process ensures consistency in applying the recharacterization rule, provides clarity to participants about how their contributions can be adjusted, and helps the plan maintain compliance with regulatory requirements. This documentation will aid in effective administration and reviewing of contributions, thus ensuring that the plan operates smoothly and meets the needs of participants.

Other options, while relevant in different contexts of plan administration, do not address the specific need to document the operational aspects of recharacterization, making them less critical in this scenario.