Earlier this year, the DOL’s Employee Benefits Security Administration issued cybersecurity guidance for retirement plan sponsors, fiduciaries, recordkeepers, and individuals. It lays out the obligations of “accountable plan fiduciaries” to mitigate cybersecurity dangers to retirement plan belongings and participant information. Concerning finest practices, the DOL steerage for retirement plan cybersecurity recommends a three-pronged method:

1. Ideas for hiring a retirement plan service supplier

2. Retirement plan cybersecurity finest practices

3. On-line safety ideas for plan fiduciaries and individuals

The DOL’s 3-Pronged Cybersecurity Plan

Given as we speak’s heightened cybersecurity dangers, adopting a security-first mindset is crucial for advisors within the retirement plan house. By educating your purchasers in regards to 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 purchasers? Let’s evaluate the specifics of the DOL steerage for retirement plan cybersecurity.

1) Tips for hiring a retirement plan service provider. Many (if not most) plan sponsors depend on third-party service suppliers for help with plan administration and recordkeeping. You possibly can assist purchasers make the precise choice for his or her plans by making certain that they give attention to the next finest practices when vetting third-party distributors:

• Ask in regards to the service supplier’s info safety requirements, practices, insurance policies, and audit outcomes. Your plan sponsor purchasers 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 evaluate audit outcomes, demonstrating compliance with the usual.

• Consider the service supplier’s trade observe document. Pink flags may embrace info safety incidents, litigation, or authorized proceedings associated to the seller’s providers.

• Talk about whether or not the service supplier has skilled previous safety breaches. In that 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 brought on by cybersecurity and identification theft breaches?

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

  • Info safety reporting

  • Provisions on the use and sharing of knowledge and confidentiality

  • Notification of cybersecurity breaches

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

  • Insurance coverage

2) Retirement plan cybersecurity best practices. Growing a coverage primarily based on finest practices will allow plan fiduciaries to behave prudently and mitigate cybersecurity danger. You should definitely educate your plan sponsor purchasers on the next pillars of 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

  • Establish cybersecurity occasions and reply to them

  • Work to revive operations and providers

• Set up sturdy safety insurance policies, pointers, 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 obligations.

• Develop sturdy information entry management procedures.

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

• Implement and handle a safe programs growth life cycle (SDLC) program (i.e., a proper means of making certain that sufficient safety controls are carried out).

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

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

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

• Appropriately reply to previous cybersecurity incidents.

3) Online security tips for plan fiduciaries and participants. Though the next ideas is likely to be acquainted, conserving them high of thoughts will assist your purchasers and their plan individuals cut back the chance of fraud and loss to their retirement accounts:

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

• Create sturdy and distinctive passwords.

• Use multifactor authentication.

• Maintain private contact info present.

• Shut or delete unused accounts.

• Be cautious of free Wi-Fi.

• Be within the know concerning indicators of phishing assaults.

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

Cybersecurity Consciousness Mindset

In accordance with the DOL guidance 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 purchasers and their plan individuals. In the event you’re an advisor who helps or acts as a plan fiduciary, you have got an obligation to do your half in educating your purchasers concerning cybersecurity. It’s additionally enterprise observe—and a very good approach to construct relationships with retirement plan sponsors.

For extra info on cybersecurity, read our recent post on the significance of cyber legal responsibility insurance coverage. We additionally advocate visiting the Cybersecurity Awareness Month web site.