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August302021
DOL Offers Best Practices to Defend ERISA Covered Retirement Plans from Cyberattack

Alexander Moshinsky, CPA, Director, Operational Advisory and Risk Management

08.30.21 | Operations Chat

The many millions of dollars in assets currently housed in employee benefit plans is cause enough to expect the most inventive cybercriminals to take their best shot. To add further allure, there is the coveted personal data of plan participants. It should come as no surprise that the Department of Labor’s Employee Benefits Security Administration (EBSA) decided to issue cybersecurity guidance for employee benefit plans. The guidance is aimed at:

  • Plan sponsors and fiduciaries
  • Recordkeepers
  • Plan participants

The guidance comes in three components:

Tips for Hiring a Service Provider: Geared to sponsors and fiduciaries, it advises that a service provider under consideration demonstrate strong cybersecurity practices. It is important to assess the quality of their security standards, practices, and policies. Learn if they employ an outside auditor to review their measures and ask to review the results of that audit. Look into their track record to see if they suffered any breaches and what their response was. The EBSA guidance also states that any contract with a service provider requires ongoing compliance with cybersecurity and information standards and that the provider meet government laws and requirements relating to the security of plan participants’ information.

Cybersecurity Program Best Practices: This area is aimed at recordkeepers, service providers, and plan fiduciaries to assist them in dealing with cybersecurity risks with an even dozen recommendations.

  1. Develop a formal, well-documented cybersecurity program
  2. Carry out annual risk assessments
  3. Engage a reliable third party for an annual audit of security controls
  4. Produce, define, and assign security roles and responsibilities
  5. Maintain strong access control procedures
  6. Confirm that assets stored in a cloud or managed by a third party have appropriate security reviews and independent security assessments
  7. Perform periodic cybersecurity awareness training
  8. Maintain a secure system development life cycle (SDLC) program
  9. Establish a business resiliency program that includes business continuity, disaster recovery, and incident response
  10. Encrypt sensitive data, stored and in transit
  11. Follow best security practices when initiating technical controls
  12. Appropriately respond to any previous cybersecurity incidents

Online Security Tips: This is guidance for both plan participants and beneficiaries when they are reviewing their accounts online. Among the recommendations are regular monitoring of the accounts, the use of strong passwords (no baby birthdays or ABC123), and the use of multi-factor authentication. This security feature requires multiple means of identification at login and is widely recognized as the most secure software authentication method for verifying access to data and applications. There is also advice on telltale signs that indicate that you are the subject of phishing. Using the latest antivirus software is also strongly recommended.

For more detail on the EBSA’s recommendations, visit:

https://www.dol.gov/agencies/ebsa/key-topics/retirement-benefits/cybersecurity

If you have any questions, I can be reached at 212.331.7448 | amoshinsky@berdonllp.com or contact your Berdon advisor.

Alexander Moshinsky, Director of Operational Advisory and Risk Management at Berdon LLP, brings more than 25 years of experience in the financial services, real estate, and other sectors — working with major institutions and government regulatory agencies including broker-dealers and dark pool network operators.

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