DOL's Cybersecurity Program Best Practices
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Cyber and Plan Security Cybersecurity Program Best Practices The DOL has prepared these best practices for use by recordkeepers and other service providers responsible for retirement plan-related IT systems and data, and for plan fiduciaries making prudent decisions on the service providers they should hire. Source: Dol.gov On April 14, 2021, the DOL issued a cybersecurity guidance package directed to plan sponsors, fiduciaries regulated under ERISA, recordkeepers and other service providers, and participants and beneficiaries. This is DOL's first guidance directly addressing cybersecurity. Source: Groom.com New Guidance for Mitigating Retirement Plan Cybersecurity Risk On April 14, 2021, the DOL issued its first cybersecurity best practices guidance for retirement plans. The guidance is set forth in three parts and emphasizes that plan sponsors and fiduciaries must take steps to mitigate cybersecurity risks as part of the fiduciary obligations imposed on them by ERISA. Source: ebglaw.com Protecting Balances From Cyber Thieves Who exactly is responsible if a participant's balance is stolen? While that may not be exactly clear, a recent blog entry suggests that it may be prudent to take steps to protect participants' retirement accounts from cybercrime nonetheless. Source: Asppa.org »» Click here for more on Cybersecurity Issues Fiduciary and Plan Governance DOL Guidance for Retirement Plan Fiduciaries in Search of Missing Participants The DOL recently issued important guidance for retirement plan sponsors and fiduciaries on their obligations to find missing participants entitled to retirement plan benefits. Retirement plan sponsors and fiduciaries are at greater risk given the uptick in missing participant audits by the DOL. The Guidance generally addresses the three components of the missing participant issue. Source: Ebglaw.com »» Click here for more Fiduciary and Plan Governance Material Insight: Studies, Research, and White Papers 401k Litigation Spike Spurs Trend in Fiduciary Outsourcing Plan sponsor fiduciaries who take a 'do-it-yourself' approach face huge potential exposure for underperforming investments and excessive plan fees. Noted ERISA attorney Carol Buckmann helps explain why outsourcing investment responsibilities to an investment manager or outsourced chief investment officer is trending. Source: 401kspecialistmag.com »» Click here for More Studies, Research, and White Papers Items of Special Interest to Service Providers DOL Issues Guidance on 2020 Investment Advice Exemption The DOL released a set of Frequently Asked Questions designed to clarify certain aspects of Prohibited Transaction Exemption 2020-02. The exemption enables investment advice fiduciaries to ERISA plans and IRAs to receive a wide range of compensation as a result of the advice without running afoul of the applicable prohibited transaction rules. This piece summarizes some of the key takeaways from the FAQs. Source: Fiduciarygovernanceblog.com DOL Releases FAQs on PTE 2020-02, Foreshadows Future Activity on Investment Advice On April 13, 2021, the DOL issued a set of Frequently Asked Questions on the DOL's new class exemption for the provision of investment advice, known as Prohibited Transaction Exemption 2020-02. The FAQs also cover DOL's interpretation of the five-part test under its 1975 regulation defining who is an investment advice fiduciary under ERISA and Section 4975 of the Internal Revenue Code. Source: Groom.com ERISA Attorneys Digest the DOL's New PTE FAQ The guidance published by the Department of Labor reminds the industry that boilerplate, fine print disclaimers that investment advice is not being provided won't cut it. Source: Planadviser.com 403b Plans 403b Terminations: Important Considerations There are a variety of important considerations concerning terminations and freezes of a plan and that includes 403b plans. In an ASPPA webcast, Kelsey Mayo, American Retirement Association's Director of Regulatory Policy and a partner with the Poyner Spruill LLP law firm, addressed priorities related to terminations of 403b plans. Source: Napa-net.org »» Click here for More 403b Material Court and Legal Can Mandatory Arbitration Rein in ERISA Litigation? Appellate Courts Weigh In Mandatory arbitration of fiduciary breach claims is the latest and most significant battleground. ERISA is silent on arbitration, but the Federal Arbitration Act encourages arbitration of disputes. Two relatively recent Supreme Court decisions upheld arbitration clauses in the employment context, although the Supreme Court has not specifically addressed the permissibility of mandatory arbitration under ERISA. In the meantime, federal courts are grappling with these issues in inconsistent decisions. Source: Cohenbuckmann.com Principal Prevails in Price-Fixing Fiduciary Suit In a complicated case that a federal judge acknowledged "...presents interesting issues about what it means to be an ERISA fiduciary under the circumstances presented," Principal Life once again fended off fiduciary claims regarding the operation of its PFIO offering. Source: Napa-net.org Judge Finds Most Allegations Sufficient in Lawsuit Over CITs A federal judge has moved forward claims in an ERISA lawsuit against pharmaceutical product manufacturing company Astellas US LLC, its board of directors, and its retirement plan administrative committee, as well as the plan's discretionary investment manager, Aon Hewitt Investment Consulting. Among other claims, the lawsuit says Aon and a 401k plan sponsor caused the plan to invest in Aon's proprietary collective investment trusts for Aon's benefit. Source: Planadviser.com »» Click here for more Court and Other Legal Issues Multiple Employer Plans (MEP) Multiple Employer Plans: Fiduciary Litigation Risk? As MEP solutions begin to accumulate participants and assets, plaintiffs' lawyers will inevitably train their sights on MEPs as a fiduciary litigation target. Indeed, they have already begun to do so. Source: Napa-net.org Once They Catch On, PEPs Could Grow Exponentially Much has been said so far about the importance of the nascent PEP market. Recordkeepers, investment managers, TPAs and retirement plan advisers, and consultants alike are all expected to take different roles in PEPs as sponsors, administrators, registered PPPs, and fiduciaries. The current hesitancy over how they will take shape will be overcome by appreciation among advisers and sponsors alike at the prospect of expanding retirement coverage, sources say. Source: Planadviser.com »» Click here for more on Multiple Employer Plans Compliance and Regulatory IRS Sets 2021 Retirement Plan Compliance Priorities The IRS's Tax Exempt and Government Entities Compliance Governance Board has approved the items noted here to be prioritized and resourced, primarily through examination. Source: Futureplan.com »» Click here for more Compliance and Regulatory Material Marketplace News John Hancock Retirement Expands Advice Program to All 401k Plans Fiduciary Benchmarks Rebrands as Fiduciary Decisions Betterment 401k Partners With Bennie to Improve Financial Wellness Pentegra Introduces Open, Independent PEP
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