Cyber-attacks have been in mainstream news since the turn of the century. With new technologies comes new ways to abuse them. Data storage and the use of online access to accounts has evolved to enter almost every aspect of business and finance. Retirement planning is no different.
Many businesses or retirement planning firms require users and employers to set up their plans through the internet. Retirement planning is a deep diving process which requires the input of personal data to ensure your funds are being handled correctly in accordance with your employer, the law, and you.
Because of the shift to online or digital formats for many employer’s company retirement funds, employers and entities with access to your personal information must be aware and take precautions regarding potential security threats. This means cyber security is a crucial concern for all parties involved in modern day retirement planning.
Also known as information technology security, cyber security is the practice of protecting computers, hard drives, servers, networks, electronic systems, and mobile devices from any data leaks or malicious attacks. The value of personal data in a society driven by technology cannot be understated. If your personal information did not have value, cyber security would not be a major concern for data storage practices.
According to a study done by RiskBase Security, data breaches from 2018 to 2019 doubled in occurrences and nearly 8 billion records of information had been breached by cyber security attacks1. Luckily, developers and information housing companies are aware of this threat and invest millions worldwide to protect their users from malicious attacks.
It is important to understand how your data is being protected before you enter any personal information to a website or company, even if you feel this information could not have an impact on you if it were to be breached.
Retirement Planning in the 21st Century
Retirement planning and cybersecurity are two terms that were not traditionally associated with each other. Today, that is not the case.
Retirement planning involved a process of entering large quantities of personal information to an employer and an outside retirement planning agency to ensure you funds are handled correctly. This information could include banking information, social security numbers, addresses, beneficiaries and phone numbers.
Due to the large amount of personal information stored with retirement plan sponsors, the Department of Labor of the United States released a statement and provided guidance on the responsibility of these entities. Retirement plan sponsors hold a fiduciary responsibility to their users to mitigate and proactively defend funds and information from the threat of cyber-attacks.
Amongst the guidance released by the DOL was the best practices to use to protect employees from their data being breached. Guidance included having a well-documented plan for cybersecurity available for users to read, conducting in depth annual or biannual risk assessments, employing the use of reliable third-party cyber security audits, and having a well-documented and thorough protocol in the case of data being leaked or breached.
Now, more than ever, is important to make sure your retirement funds are being handled with care and responsibility against any cyber security threats.
Fragasso Financial Advisors, an investment and financial planning firm based in Pittsburgh, PA, recently posted a blog discussing this topic titled What Retirement Plan Sponsors and Participants Should Know About Cybersecurity Related to Retirement Plan. Please take the time to read it if you would like to learn more about cybersecurity and how it relates to your retirement plans.
Investment Advice offered by investment advisor representatives through Fragasso Financial Advisors, a registered investment advisor.