Earlier this 12 months, the DOL’s Worker Advantages Safety Administration issued cybersecurity steerage for retirement plan sponsors, fiduciaries, recordkeepers, and members. It lays out the obligations of “accountable plan fiduciaries” to mitigate cybersecurity dangers to retirement plan property and participant knowledge. Relating to 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 members

The DOL’s 3-Pronged Cybersecurity Plan

Given right now’s heightened cybersecurity dangers, adopting a security-first mindset is crucial for advisors within the retirement plan area. 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 will you assist defend the property and participant knowledge of your retirement plan shoppers? Let’s evaluation 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 best determination for his or her plans by making certain that they give attention to 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 examine this knowledge with business requirements.

• Find out how the service supplier validates its practices and which ranges of safety requirements it has met and carried out. Right here, the main target ought to be on contract provisions that give the shopper the best to evaluation audit outcomes, demonstrating compliance with the usual.

• Consider the service supplier’s business observe report. Crimson flags would possibly embrace info safety incidents, litigation, or authorized proceedings associated to the seller’s companies.

• 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 brought on by cybersecurity and identification theft breaches?

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

  • Info safety reporting

  • Provisions on the use and sharing of data and confidentiality

  • Notification of cybersecurity breaches

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

  • Insurance coverage

2) Retirement plan cybersecurity finest practices. Creating a coverage primarily based 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 an excellent coverage:

• 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 info. This system ought to:

  • Pinpoint dangers

  • Present crucial safety

  • Establish cybersecurity occasions and reply to them

  • Work to revive operations and companies

• Set up robust 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 robust knowledge entry management procedures.

• Be certain that any property or knowledge saved in a cloud or managed by a third-party service supplier are topic to applicable safety opinions and unbiased safety assessments.

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

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

• Be certain that delicate knowledge is encrypted whereas saved and in transit.

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

• Appropriately reply to previous cybersecurity incidents.

3) On-line safety ideas for plan fiduciaries and members. Though the next ideas could be acquainted, conserving them high of thoughts will assist your shoppers and their plan members 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 maintain apps and software program present.

Cybersecurity Consciousness Mindset

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

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