As retirement plan sponsors juggle compliance with ERISA—and the evolving landscape of cybersecurity threats—legal experts advise increased diligence.
The first known use of the word cybersecurity was in 1989—nearly fifteen years after the passage of the Employee Retirement Income Security Act of 1974 (ERISA). Nonetheless, living in the “here and now,” plan sponsors must increasingly concern themselves with cybersecurity.
As legal experts at Foley & Larder LLP describe:
Since ERISA pre-dates modern computing, ERISA regulations are silent regarding cybersecurity. Neither the Department of Labor (“DOL”) nor the IRS have issued any formal guidance addressing cybersecurity obligations under ERISA. COVID-19 has resulted in more employees working remotely and further complicated ERISA/cybersecurity related considerations. Regardless, ERISA mandates that plan fiduciaries meet certain standards of conduct.
Importantly, the legal experts further point out in regard to plan sponsor fiduciary liability exposure that:
Plan fiduciaries are always the prime target for potential liability (i.e., including for alleged breach of fiduciary duty). Plan fiduciaries must address data breach matters.
Given that plan sponsors will face claims related to cyber breaches, Foley & Larder LLP advises plan sponsors to work with their plan committees to ensure: technical, physical, and administrative safeguards are in place and are designed to protect the confidentiality, integrity, availability, and resiliency of plan assets.
Colonial Surety Company, a leading provider of ERISA bonds, helps plan sponsors by offering an innovative, comprehensive, service-based solution. As an ERISA Fidelity Bond expert, Colonial can help you comply with regulations and further protect your plan—and yourself in these extra challenging times.
When you choose an ERISA bond package from Colonial, you receive a discount on ERISA bond coverage for your plan; Fiduciary Liability coverage for yourself as the plan sponsor; and, the option to add on Cyber Liability coverage. Save time, money and stress: Get a Colonial Surety Coverage Package Now!
Assess Your Cybersecurity Strategy
Cybercrime has been accelerated by the pandemic. As reported by Forbes:
With more Americans working from home, cybersecurity risks are at an all-time high….Google revealed in mid-April that it had identified “18 million daily malware and phishing emails related to COVID-19.” The truth is that many of us weren’t prepared for this kind of cybercrime before the pandemic, and we aren’t now.
It is critically important for plan sponsors to put comprehensive protection in place for retirement plans. For example, Foley & Larder LLP suggests that plan sponsor:
- Have a cyber-risk management strategy and plan to protect participant data and plan investment information, including a comprehensive and clear cybersecurity program.
- Inquire about third party administrator practices and safeguards related to cybersecurity.
- Communicate with plan participants and beneficiaries regarding cyber-risk and the protocols which have been established to minimize risk.
- Ensure fiduciary liability insurance and cybersecurity insurance are in place, in the appropriate amounts to cover potential losses.
Take a Comprehensive Approach
With Cyber Liability insurance from Colonial Surety Company, plan sponsors are supported with services from forensic, legal, technology and customer care experts. In the event of a data breach, you will receive:
- Breach resolution and mitigation services
- Computer expert services
- Legal services
- Public relations and crisis management expenses
- Customer notification and call center services.
Colonial’s affordable ERISA bond packages include Cyber Liability insurance to safeguard your company and plan against a loss due to cyber attack — plus extended coverage to ensure your ERISA bond remains US Department of Labor complaint. When you choose your package, don’t forget to include Fiduciary Liability insurance to protect yourself from covered acts as the plan sponsor.
Colonial Surety Company is direct to consumer, digital insurance provider, serving all 50 states and U.S. Territories. Colonial’s I-Bonds® are available for an instant quote, purchase, print or e-file on your desktop or mobile device. Choose your ERISA Bond Package Today!