Earlier this yr, the DOL’s Worker Advantages Safety Administration issued cybersecurity steering for retirement plan sponsors, fiduciaries, recordkeepers, and members. It lays out the obligations of “accountable plan fiduciaries” to mitigate cybersecurity dangers to retirement plan belongings and participant knowledge. Concerning 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 ideas for plan fiduciaries and members

The DOL’s 3-Pronged Cybersecurity Plan

Given immediately’s heightened cybersecurity dangers, adopting a security-first mindset is important 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 enhance 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 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 purchasers make the proper choice 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 examine 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 ought to be on contract provisions that give the shopper the proper to evaluate audit outcomes, demonstrating compliance with the usual.

• Consider the service supplier’s trade observe report. Crimson flags would possibly embody data 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 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 data safety breaches, whereas different phrases improve cybersecurity safety for the plan and its members, together with:

  • Data 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 based mostly on finest practices will allow plan fiduciaries to behave prudently and mitigate cybersecurity danger. Make sure you educate your plan sponsor purchasers on the next pillars of a very good coverage:

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

  • Pinpoint dangers

  • Present crucial safety

  • Establish cybersecurity occasions and reply to them

  • Work to revive operations and providers

• 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 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 opinions and impartial safety assessments.

• Implement and handle a safe techniques improvement life cycle (SDLC) program (i.e., a proper method of making certain that ample 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., often 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 may be acquainted, protecting them prime of thoughts will assist your purchasers and their plan members scale 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.

• 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 preserve apps and software program present.

Cybersecurity Consciousness Mindset

Based on the DOL steering 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 members. For those who’re an advisor who helps or acts as a plan fiduciary, you could have an obligation to do your half in educating your purchasers concerning cybersecurity. It’s additionally a very good enterprise observe—and a very good solution to construct relationships with retirement plan sponsors.

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