Earlier this yr, the DOL’s Worker Advantages Safety Administration issued cybersecurity steerage for retirement plan sponsors, fiduciaries, recordkeepers, and contributors. It lays out the obligations of “accountable plan fiduciaries” to mitigate cybersecurity dangers to retirement plan belongings and participant information. Relating to finest practices, the DOL steerage for retirement plan cybersecurity recommends a three-pronged method:
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Ideas for hiring a retirement plan service supplier
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Retirement plan cybersecurity finest practices
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On-line safety ideas for plan fiduciaries and contributors
The DOL’s 3-Pronged Cybersecurity Plan
Given right this moment’s heightened cybersecurity dangers, adopting a security-first mindset is important for advisors within the retirement plan house. By educating your shoppers concerning the DOL’s cybersecurity expectations, you’ll construct relationships with retirement plan sponsors and improve the worth you present them.
How will you assist defend the belongings and participant information of your retirement plan shoppers? Let’s overview the specifics of the DOL steerage for retirement plan cybersecurity.
1) Ideas for hiring a retirement plan service supplier. Many (if not most) plan sponsors depend on third-party service suppliers for help with plan administration and recordkeeping. You possibly can assist shoppers make the correct choice for his or her plans by making certain that they concentrate on the next finest practices when vetting third-party distributors:
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Ask concerning the service supplier’s data safety requirements, practices, insurance policies, and audit outcomes. Your plan sponsor shoppers ought to examine this information with business requirements.
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Learn the way the service supplier validates its practices and which ranges of safety requirements it has met and applied. Right here, the main target must be on contract provisions that give the consumer the correct to overview audit outcomes, demonstrating compliance with the usual.
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Consider the service supplier’s business observe file. Purple flags may embrace data safety incidents, litigation, or authorized proceedings associated to the seller’s providers.
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Focus on whether or not the service supplier has skilled previous safety breaches. In that case, what occurred? How did the service supplier reply?
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Discover out whether or not the service supplier has any insurance coverage insurance policies. Would such insurance policies cowl losses attributable to cybersecurity and identification theft breaches?
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Be certain that the service supplier contract requires ongoing compliance with cybersecurity and knowledge safety requirements. Some contract provisions might restrict the service supplier’s accountability for data safety breaches, whereas different phrases improve cybersecurity safety for the plan and its contributors, together with:
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Info safety reporting
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Provisions on the use and sharing of knowledge and confidentiality
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Notification of cybersecurity breaches
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Compliance with data retention and destruction, privateness, and knowledge safety legal guidelines
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Insurance coverage
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2) Retirement plan cybersecurity finest practices. Creating a coverage primarily based on finest practices will allow plan fiduciaries to behave prudently and mitigate cybersecurity threat. Make sure to educate your plan sponsor shoppers on the next pillars of a superb coverage:
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Create a proper, well-documented cybersecurity program to establish and assess inner and exterior cybersecurity dangers that threaten the confidentiality, integrity, or availability of saved, nonpublic data. This system ought to:
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Pinpoint dangers
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Present needed safety
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Establish cybersecurity occasions and reply to them
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Work to revive operations and providers
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Set up sturdy safety insurance policies, tips, and requirements.
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Conduct annual threat assessments, in addition to periodic cybersecurity consciousness coaching.
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Carry out an annual third-party audit of safety controls.
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Outline and assign data safety roles and tasks.
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Develop sturdy information entry management procedures.
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Be certain that any belongings or information saved in a cloud or managed by a third-party service supplier are topic to acceptable safety opinions and unbiased safety assessments.
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Implement and handle a safe methods growth life cycle (SDLC) program (i.e., a proper means of making certain that enough safety controls are applied).
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Have an efficient enterprise resiliency program that addresses enterprise continuity, catastrophe restoration, and incident response.
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Be certain that delicate information is encrypted whereas saved and in transit.
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Implement sturdy technical safety options and safety finest practices (e.g., commonly replace antivirus software program and again up information).
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Appropriately reply to previous cybersecurity incidents.
3) On-line safety ideas for plan fiduciaries and contributors. Though the next ideas is likely to be acquainted, conserving them prime of thoughts will assist your shoppers and their plan contributors scale back the chance of fraud and loss to their retirement accounts:
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Register, arrange, and routinely monitor any on-line retirement account.
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Create sturdy and distinctive passwords.
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Use multifactor authentication.
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Maintain private contact data present.
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Shut or delete unused accounts.
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Be cautious of free Wi-Fi.
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Be within the know concerning indicators of phishing assaults.
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Use antivirus software program and preserve apps and software program present.
Cybersecurity Consciousness Mindset
In line with the DOL steerage for retirement plan cybersecurity, the insurance policies described above are designed to assist defend an estimated $9.3 trillion in plan belongings. This huge sum highlights the cyberthreats confronted by your plan sponsor shoppers and their plan contributors. If you happen to’re an advisor who helps or acts as a plan fiduciary, you might have an obligation to do your half in educating your shoppers concerning cybersecurity. It’s additionally a superb enterprise apply—and a very good strategy to construct relationships with retirement plan sponsors.
For extra data on cybersecurity, learn our latest submit on the significance of cyber legal responsibility insurance coverage. We additionally advocate visiting the Cybersecurity Consciousness Month web site.
