PLANSPONSOR - November - December 2023 - 11

understanding
what
happened;
notifying
the insurance carrier; tapping both
in-house or external expertise to quickly
discern who was affected; and, finally, notifying
participants as quickly as possible.
When a security issue is detected,
Kreps says, sponsors should be as clear as
possible in disclosing it.
" Most normal humans expect ... that
their information may be stolen, " Kreps
says. " We've all just accepted it, but what
they get really annoyed about ... is not being
told, and not knowing how to get it [fixed]. "
Understanding the scope of a
problem can be particularly challenging
for plan sponsors when a breach involves a
third party and the sponsor may only learn
about the breach long after it occurred.
Even then, the advice for the sponsor
remains the same.
TIDBITS
Many Retirement Savers Face a New Test
As of October 1, after a 3 1/2-year break, people with student loan debt had
to resume paying it off. An August survey of 2,112 federal student loan takers
suggests how this requirement-especially now, with inflation and higher
interest rates-will affect their ability to save for retirement, and more.
Impact on Retirement
Plan Savings
* 75% said resuming student
debt repayment will affect
their ability to save for
retirement.
* To restart making payments
in October, more than
1 in 5 borrowers expected
to reduce savings
overall (29%), savings for
emergencies (29%) and
savings for retirement (22%).
More Pressure on Women's
Financial Security
* 60% of female borrowers
said they did not think
they could afford to resume
payments in October.
* Female borrowers were
three times less likely
than men-5% vs. 16%-
to have put their disposable
income from paused
loan payments toward
retirement.
Source: Corebridge Financial, with Morning Consult
Notable Impact on Borrowers
Earning <$50,000
* 77% said debt repayment
will affect saving for
retirement.
* 67% said they will likely
or definitely be unable to
afford to make payments
toward their student loan/s.
* 53% expect to miss 1 or
more payments, and 38%
expect to default on a loan.
" When they know, move as quickly
as possible, " Kreps says. " And when
you're aware of the breach, then try and
get those notices out. "
Kreps advises sponsors to write rapid
notice requirements into their service
agreements with a timeline for informing
the sponsor of a breach and an outline of
who will take the lead on communications
and who will approve any communications
made. While it remains an open question
whether data is considered a plan asset,
plan sponsors nonetheless must fulfill
their fiduciary duties, he says.
Third-Party Risk
" Third-party risk is one of the higher risks
associated with plan data and information,
and it's cumulative, " notes Michael
Stoyanovich, vice president and senior
consultant with Segal's administration and
technology consulting practice. " The more
vendors you share, the greater the risk. "
Stoyanovich urges sponsors to
third-party
enhance
risk-management
programs and practices. He advises regularly
reviewing the data and information
sent to any third party, since sponsors
can reduce risk by limiting what data is
shared with vendors.
Additionally, he encourages including
language in contracts allowing the right to
review vendors' third-party annual cybersecurity
assessments or audits and audit notifications.
He also recommends reviewing
minimum cyber-liability insurance and
asking about past cybersecurity incidents,
besides requesting timely notification of
any future incidents, should they occur.
-Elizabeth Harris
PLANSPONSOR.COM November - December 2023 11
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