ERISA Advisory Council Makes Recommendations on Cybersecurity
The ERISA Advisory Council on Nov. 10 issued recommendations on actions the Department of Labor (DOL) can take regarding cybersecurity and making workplace retirement accounts more secure.
The council had announced earlier this year that it was embarking on an in-depth study of cybersecurity as it applies to benefit plans. But this is not a new effort — this project builds on previous reports from 2011 and 2015.
In the report it just issued, the council made the following suggestions regarding actions the DOL can take to make plan-to-plan transfers and accounts more secure.
1. Issue a Request for Information to explore how the DOL can encourage and support the adoption of secure electronic data standards for the development of a process, system, platform and/or clearinghouse to facilitate acceptance and expedite processing of eligible rollovers into ERISA retirement plans. This includes:
- electronic forms and processing; and
- electronic transfer of funds.
2. Publish retirement plan sponsor education to encourage sponsors to support plan-to-plan transfers, and publish sample participant communications that educate participants on the potential benefits of, and process for, consolidating accounts in an ERISA retirement plan.
3. Address questions regarding the DOL’s fiduciary rule, its exceptions and any applicable Prohibited Transaction Exemptions as they relate to communications to participants by employees of plan sponsors and service providers regarding plan-to-plan transfers and account consolidation into retirement plans covered by ERISA.
4. Encourage and/or collaborate with the Treasury Department to do the following:
- summarize existing guidance with respect to the requirements to grant relief from disqualification for eligible retirement plans accepting rollovers, and accordingly, provide plain language education to plan sponsors and administrators, and
- revisit the Code Section 402(f) notice for harmonization with the DOL objective of promoting lifetime plan participation (as the 2015 council recommended) and provide user-friendly accompanying guidance to encourage plan-to-plan transfers and account consolidation into ERISA retirement plans.
5. Engage in dialogue with states and political subdivisions that are considering and/or pursuing payroll-deduction savings programs, as well as with the Treasury as it develops and oversees its myRA program, in order to identify impediments to portability between these programs and ERISA retirement plans and to facilitate consolidation of participant accounts.