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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 property and participant knowledge. Concerning finest practices, the DOL steerage for retirement plan cybersecurity recommends a three-pronged method:
Suggestions for hiring a retirement plan service supplier
Retirement plan cybersecurity finest practices
On-line safety ideas for plan fiduciaries and contributors
The DOL’s 3-Pronged Cybersecurity Plan
Given immediately’s heightened cybersecurity dangers, adopting a security-first mindset is crucial for advisors within the retirement plan area. By educating your shoppers in regards to 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 property and participant knowledge of your retirement plan shoppers? Let’s overview the specifics of the DOL steerage 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 suitable determination for his or her plans by making certain that they deal with 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 shoppers ought to examine this knowledge with trade 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 consumer the suitable to overview 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 companies.
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 attributable to cybersecurity and identification theft breaches?
Be certain that the service supplier contract requires ongoing compliance with cybersecurity and data 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 contributors, together with:
Data safety reporting
Provisions on the use and sharing of knowledge 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. Creating a coverage primarily based on finest practices will allow plan fiduciaries to behave prudently and mitigate cybersecurity threat. You’ll want to educate your plan sponsor shoppers on the next pillars of a great 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 essential safety
Establish cybersecurity occasions and reply to them
Work to revive operations and companies
Set up sturdy safety insurance policies, tips, and requirements.
Conduct annual threat 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 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 evaluations and impartial safety assessments.
Implement and handle a safe methods improvement life cycle (SDLC) program (i.e., a proper method of making certain that enough 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 sturdy technical safety options and safety finest practices (e.g., usually replace antivirus software program and again up knowledge).
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, maintaining them prime 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 sturdy 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 hold apps and software program present.
Cybersecurity Consciousness Mindset
Based on the DOL steerage for retirement plan cybersecurity, the insurance policies described above are designed to assist shield an estimated $9.3 trillion in plan property. This huge sum highlights the cyberthreats confronted by your plan sponsor shoppers and their plan contributors. When you’re an advisor who helps or acts as a plan fiduciary, you’ve an obligation to do your half in educating your shoppers relating to cybersecurity. It’s additionally a great enterprise observe—and a very good method to construct relationships with retirement plan sponsors.
For extra info on cybersecurity, learn our current submit on the significance of cyber legal responsibility insurance coverage. We additionally advocate visiting the Cybersecurity Consciousness Month web site.
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