Ensuring Data Protection
Today we would like to talk about Ensuring Data Protection in Retirement Plan Compliance. Along with outlining how a plan sponsor should accomplish data protection.
The complexities surrounding retirement plan compliance have increased over time. In response, plan sponsors have started enlisting third-party experts to deliver specific services for their plans. Solutions such as recordkeeping, third-party administration, investment management, and full plan oversight are just a few examples.
However, when outsourcing these duties, it's crucial that plan sponsors oversee these service providers diligently. They must ensure that these professionals meet their obligations and safeguard the plan against potential liabilities. One critical facet of this is the control and protection of the plan's data. Given that retirement plans contain vast amounts of private information for both the company and its participants, it's imperative for the plan sponsor to ensure that this data remains secure.
The Department of Labor offers guidelines concerning cybersecurity for retirement plan service providers. Adhering to these guidelines demonstrates a plan sponsor's commitment to responsibility and diligence.
Key responsibilities include:
- Checking the service provider's cybersecurity protocols, such as encryption methods and data breach response plans.
- Reviewing the service provider's past data security records and understanding any previous breaches and the preventive measures taken thereafter.
- Ensuring contractual indemnification by the service provider, where they accept full responsibility for any data breaches due to their actions.
- Requiring the service provider to have appropriate cybersecurity insurance that covers their scope of work for the plan.
Additionally, plan sponsors must regularly confer with their service providers, ensuring they maintain robust cybersecurity standards and insurance policies. Any changes in data security commitments should be promptly reviewed.
Ultimately, continuous scrutiny of data security is essential to protect every participant. This oversight remains the plan sponsor's duty, and they must diligently work towards creating the safest environment possible.
For more information about ensuring data protection, contact us today.
