DOL Steering for Retirement Plan Cybersecurity

Earlier this yr, the DOL’s Worker Advantages Safety Administration issued cybersecurity steerage for retirement plan sponsors, fiduciaries, recordkeepers, and individuals. It lays out the obligations of “accountable plan fiduciaries” to mitigate cybersecurity dangers to retirement plan property and participant information. Concerning finest practices, the DOL steerage 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 individuals

The DOL’s 3-Pronged Cybersecurity Plan

Given at the moment’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 shield the property and participant information of your retirement plan shoppers? Let’s assessment 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 choice for his or her plans by guaranteeing that they concentrate on 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 information with business 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 must be on contract provisions that give the shopper the suitable to assessment audit outcomes, demonstrating compliance with the usual.

• Consider the service supplier’s business observe file. 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. 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 id theft breaches?

• Make sure that the service supplier contract requires ongoing compliance with cybersecurity and data safety requirements. Some contract provisions could restrict the service supplier’s accountability for info safety breaches, whereas different phrases improve cybersecurity safety for the plan and its individuals, 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 superb 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 info. This system ought to:

  • Pinpoint dangers

  • Present vital safety

  • Determine cybersecurity occasions and reply to them

  • Work to revive operations and providers

• 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 info safety roles and obligations.

• Develop robust information entry management procedures.

• Make sure that any property or information saved in a cloud or managed by a third-party service supplier are topic to acceptable safety opinions and unbiased safety assessments.

• Implement and handle a safe methods improvement life cycle (SDLC) program (i.e., a proper method of guaranteeing that ample safety controls are carried out).

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

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

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

• Appropriately reply to previous cybersecurity incidents.

3) On-line safety ideas for plan fiduciaries and individuals. Though the next ideas may be acquainted, preserving them high of thoughts will assist your shoppers and their plan individuals 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 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 preserve apps and software program present.

Cybersecurity Consciousness Mindset

In keeping with 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 individuals. If you happen to’re an advisor who helps or acts as a plan fiduciary, you will have an obligation to do your half in educating your shoppers relating to cybersecurity. It’s additionally a superb enterprise observe—and a very good technique to construct relationships with retirement plan sponsors.

For extra info 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.