Cyber for Plan Sponsors

Treasure Trove for Cyber Criminals



Money and data—that’s the obvious answer to why cyber criminals continue to come up with new ways to access our retirement accounts. In the face of growing threats, ERISA law experts are urging retirement plan sponsors to take the Department of Labor’s  cybersecurity guidance ever more seriously.


Suggestions or Imperatives?

When the Department of Labor (DOL) issued cybersecurity guidance last year, no one was entirely clear as to when or how it would be enforced. Rapidly, however, audits and investigations began including the new cybersecurity protocols, catching employers off guard. Given the high stakes involved in both protecting retirement accounts and adhering to DOL mandates, lawyers recommend that plan sponsors conduct cybersecurity reviews, implement ongoing testing and monitoring and promptly attend to any gaps or problems uncovered. As JD Supra reports:


Benefit plans are increasingly viewed as lucrative targets for cyber criminals, given the almost $9.3 trillion in plan assets held in retirement accounts systemwide and the treasure trove of participant data maintained in online databases by plan sponsors, plan fiduciaries, third-party administrators, and recordkeepers for all plan types. Further, increased electronic access to benefit portals by participants using internet-connected devices, including cell phones, laptops, and tablets, which suffer an average of 5,200 cyberattacks per month, makes it easier for bad actors to improperly access such benefit plan systems. Because it is a matter of not if—but when—a benefit plan will experience a cyberattack, plan sponsors and fiduciaries should be motivated to act promptly to implement the DOL’s guidance despite its being framed as best practices.


Time to Bundle Up

Frosty times find retirement plan sponsors scrambling to assess the cybersecurity protocols of service providers, while also defending their own companies against the latest blizzard of cyber threats. These risks are a double whammy for plan sponsors: cybersecurity oversights can result in allegations of fiduciary failure, putting personal assets at risk. Colonial Surety’s here to help with an affordable, new, Fiduciary-Cyber Liability Insurance bundle. Armed with this coverage, if you face claims of alleged or actual breaches of duty in connection with the employee retirement plan, you’ll be covered for defense costs and penalty limits up to $1,000,000. Plus, in the event of a cyber breach, your business—and plan—will receive support at every stage of incident investigation and breach response, as well as coverage against lawsuits or regulatory actions related to the breach.


A cyber breach isnt always a disaster. Mishandling it is. Don’t go it alone:

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Essential To Understand

Passed in 1974, the Employee Retirement Income Security Act (ERISA) predates modern technology—and the rise in cyber attacks against retirement accounts. In fact, the term “cybersecurity” was not in use until about 1989. Nonetheless, in the here and now, plan sponsors must increasingly concern themselves with cybersecurity. In fact, cybersecurity issues are resulting in allegations of fiduciary breaches based on ERISA’s broadly applicable duties of prudence and loyalty.


While attending to the DOL’s Cybersecurity Guidance, don’t neglect essentials, like your ERISA fidelity bond. Failure to have an up to date ERISA bond is a common compliance issue. If caught when the IRS reviews your plan’s Form 5500, it can also trigger a DOL investigation. Colonial’s packages make it easy for plan sponsors to comply— and protect themselves. Our multi-year bundles  provide the greatest convenience and value, ensuring continuous compliance and protection. Uniquely, Colonial includes retroactive ERISA fidelity bond coverage for years when the plan was not adequately covered.


Obtain or renew your DOL required ERISA bond, with affordable Fiduciary and Cyber Liability Insurance HERE NOW.


Already have your required ERISA bond? Get our new Fiduciary-Cyber Liability bundle in minutes HERE.


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