Earlier this yr, the DOL’s Worker Advantages Safety Administration issued cybersecurity steering 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 steering for retirement plan cybersecurity recommends a three-pronged method:

1. Suggestions for hiring a retirement plan service supplier

2. Retirement plan cybersecurity finest practices

3. On-line safety suggestions for plan fiduciaries and contributors

The DOL’s 3-Pronged Cybersecurity Plan

Given as we speak’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 enhance the worth you present them.

How are you going to assist shield the belongings and participant information of your retirement plan shoppers? Let’s overview the specifics of the DOL steering for retirement plan cybersecurity.

1) Suggestions 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 precise choice for his or her plans by guaranteeing that they concentrate on the next finest practices when vetting third-party distributors:

• Ask concerning the service supplier’s info safety requirements, practices, insurance policies, and audit outcomes. Your plan sponsor shoppers ought to evaluate this information with trade requirements.

• Learn the way the service supplier validates its practices and which ranges of safety requirements it has met and carried out. Right here, the main focus ought to be on contract provisions that give the shopper the precise to overview audit outcomes, demonstrating compliance with the usual.

• Consider the service supplier’s trade observe file. Purple flags would possibly embody info safety incidents, litigation, or authorized proceedings associated to the seller’s providers.

• Focus on whether or not the service supplier has skilled previous safety breaches. If that’s the case, what occurred? How did the service supplier reply?

• 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?

• Make sure that the service supplier contract requires ongoing compliance with cybersecurity and data safety requirements. Some contract provisions might restrict the service supplier’s accountability for info safety breaches, whereas different phrases improve cybersecurity safety for the plan and its contributors, together with:

  • Info safety reporting

  • Provisions on the use and sharing of data and confidentiality

  • Notification of cybersecurity breaches

  • Compliance with information retention and destruction, privateness, and data safety legal guidelines

  • Insurance coverage

2) Retirement plan cybersecurity finest practices. Growing a coverage based mostly on finest practices will allow plan fiduciaries to behave prudently and mitigate cybersecurity danger. Remember to educate your plan sponsor shoppers on the next pillars of a very good coverage:

• Create a proper, well-documented cybersecurity program to establish and assess inside and exterior cybersecurity dangers that threaten the confidentiality, integrity, or availability of saved, nonpublic info. This system ought to:

  • Pinpoint dangers

  • Present vital safety

  • Determine cybersecurity occasions and reply to them

  • Work to revive operations and providers

• Set up robust safety insurance policies, tips, and requirements.

• Conduct annual danger assessments, in addition to periodic cybersecurity consciousness coaching.

• Carry out an annual third-party audit of safety controls.

• Outline and assign info safety roles and tasks.

• Develop robust information entry management procedures.

• Make sure that any belongings or information saved in a cloud or managed by a third-party service supplier are topic to acceptable safety evaluations and impartial safety assessments.

• Implement and handle a safe programs growth life cycle (SDLC) program (i.e., a proper method of guaranteeing that ample safety controls are carried out).

• Have an efficient enterprise resiliency program that addresses enterprise continuity, catastrophe restoration, and incident response.

• Make sure that delicate information is encrypted whereas saved and in transit.

• Implement robust technical safety options and safety finest practices (e.g., recurrently replace antivirus software program and again up information).

• Appropriately reply to previous cybersecurity incidents.

3) On-line safety suggestions for plan fiduciaries and contributors. Though the next suggestions may be acquainted, conserving them high of thoughts will assist your shoppers and their plan contributors cut back the chance of fraud and loss to their retirement accounts:

• Register, arrange, and routinely monitor any on-line retirement account.

• Create robust and distinctive passwords.

• Use multifactor authentication.

• Preserve private contact info present.

• Shut or delete unused accounts.

• Be cautious of free Wi-Fi.

• Be within the know relating to indicators of phishing assaults.

• Use antivirus software program and preserve apps and software program present.

Cybersecurity Consciousness Mindset

In accordance with the DOL steering for retirement plan cybersecurity, the insurance policies described above are designed to assist shield an estimated $9.3 trillion in plan belongings. This huge sum highlights the cyberthreats confronted by your plan sponsor shoppers and their plan contributors. In the event you’re an advisor who helps or acts as a plan fiduciary, you may have an obligation to do your half in educating your shoppers relating to cybersecurity. It’s additionally a very good enterprise apply—and a very good technique to construct relationships with retirement plan sponsors.

For extra info on cybersecurity, learn our latest put up on the significance of cyber legal responsibility insurance coverage. We additionally suggest visiting the Cybersecurity Consciousness Month web site.