Earlier this 12 months, 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 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 suggestions for plan fiduciaries and contributors

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 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 knowledge of your retirement plan purchasers? Let’s evaluate 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 may assist purchasers make the proper determination for his or her plans by making certain that they concentrate on the next finest practices when vetting third-party distributors:

• Ask in regards to the service supplier’s data safety requirements, practices, insurance policies, and audit outcomes. Your plan sponsor purchasers ought to evaluate this knowledge with trade requirements.

• Learn the way the service supplier validates its practices and which ranges of safety requirements it has met and applied. Right here, the main focus needs to be on contract provisions that give the consumer the proper to evaluate audit outcomes, demonstrating compliance with the usual.

• Consider the service supplier’s trade monitor file. Crimson flags would possibly embody data 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. 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 knowledge safety requirements. Some contract provisions could restrict the service supplier’s duty for data 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 knowledge safety legal guidelines

  • Insurance coverage

2) Retirement plan cybersecurity finest practices. Creating a coverage based mostly on finest practices will allow plan fiduciaries to behave prudently and mitigate cybersecurity threat. Be sure you educate your plan sponsor purchasers on the next pillars of coverage:

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

  • Pinpoint dangers

  • Present essential safety

  • Establish cybersecurity occasions and reply to them

  • Work to revive operations and companies

• Set up robust 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 data safety roles and obligations.

• Develop robust knowledge entry management procedures.

• Make sure that any belongings or knowledge saved in a cloud or managed by a third-party service supplier are topic to acceptable 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 satisfactory safety controls are applied).

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

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

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

• Appropriately reply to previous cybersecurity incidents.

3) On-line safety suggestions for plan fiduciaries and contributors. Though the next suggestions could be acquainted, conserving them high of thoughts will assist your purchasers and their plan contributors scale back the danger 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.

• Hold private contact data 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 maintain apps and software program present.

Cybersecurity Consciousness Mindset

In accordance 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 purchasers and their plan contributors. In the event you’re an advisor who helps or acts as a plan fiduciary, you’ve gotten an obligation to do your half in educating your purchasers concerning cybersecurity. It’s additionally enterprise follow—and a very good method to construct relationships with retirement plan sponsors.

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