The Department of Labor’s Employee Benefits Security Administration (EBSA) recently released cybersecurity guidance to help retirement plan sponsors (employers and business owners), record keepers and other plan fiduciaries mitigate the growing risks of cyber threats, including fraud and identity theft.
According to the EBSA, employer-sponsored retirement plans regulated by the Employee Retirement Income Security Act (ERISA) hold more than $9 trillion in assets and maintain personal identifying information about millions of plan participants. Sufficient protections are therefore required to safeguard retirement assets and participants identities from a long list of cybercrimes. Included in the EBSA’s first round of guidance are best practices for fiduciaries of 401(k) plans, pensions and profit-sharing plans to adopt for managing cybersecurity risks and selecting service providers with equally strong cybersecurity practices.
The EBSA recommends retirement plan fiduciaries, including third-party service providers responsible for managing and maintaining IT systems and data, take the following broad steps to mitigate cyber risks.
Additional detail for adopting these best practices is available from the EBSA and your plan provider.
It is not uncommon for corporate 401(k) retirement plan sponsors and record keepers to rely on third parties for maintaining plan records, safeguarding participants’ data, and managing online security. To help fiduciaries select and monitor these outside service providers, the EBSA offers the following tips.
Retirement plan fiduciaries should become familiar with the EBSA’s new guidance and begin the process of ensuring their policies, plans and processes adhere to these minimum standards of best practices. The Corporate Retirement Plan group with Provenance Wealth Advisors (PWA) works with company fiduciaries to help them understand their cybersecurity responsibilities and evaluate service providers.
About the Author: Sean Deviney is a CFP® professional, a retirement plan advisor and a director with Provenance Wealth Advisors (PWA), an independent financial services firm affiliated with Berkowitz Pollack Brant Advisors + CPAs. For more information, call (954) 712-8888 or email firstname.lastname@example.org.
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Sean Deviney is a registered representative of and offers securities through Raymond James Financial Services, Inc., Member FINRA/SIPC. Raymond James is not affiliated with and does not endorse the opinions or services of Berkowitz Pollack Brant Advisors and Accountants. PWA is not a registered broker/dealer and is independent of Raymond James Financial Services. Investment Advisory Services offered through Raymond James Financial Services Advisors, Inc., and Provenance Wealth Advisors.
This material is being provided for information purposes only and is not a complete description, nor is it a recommendation. Any opinions are those of PWA and not necessarily those of Raymond James. You should discuss any tax or legal matters with the appropriate professional. The information contained in this report has been obtained from sources considered to be reliable, but Raymond James does not guarantee that the foregoing material is accurate or complete.
401(k) plans are long-term retirement savings vehicles. Withdrawal of pre-tax contributions and/or earnings will be subject to ordinary income tax and, if taken prior to age 59 1/2, may be subject to a 10% federal tax penalty. Investments mentioned may not be suitable for all investors. There is no guarantee that these statements, opinions or forecasts provided herein will prove to be correct.
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Posted on 7/6/2021