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Cybersecurity: Retirement Plan Sponsors Can Protect Themselves

The digital world has opened many doors – including some to theft and the abuse of information. When it comes to retirement plans and participant assets, cybersecurity has emerged as a significant area of focus. Read on to find out how plan sponsors can protect themselves and their participants while meeting fiduciary obligations.

Technology innovation and an unrelenting push toward a digital world open us up to a range of cybersecurity risks. For retirement plans, it’s the risk of sharing financial and personal identifiable information across platforms and third-party service providers. And with participant assets and retirement security on the line, the risks weigh on many plan sponsors’ minds.

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How to Keep Participants in the Plan After Retirement

According to Vanguard’s most recent How America Saves1 survey, which looks at Americans’ retirement savings habits, 80 percent of participants eligible to take a distribution chose to preserve their assets for retirement. According to the survey, 62 percent of plans allow retirees to take installments, 32 percent allow for partial ad hoc withdrawals (more than double from five years ago), and only 2 percent force retirees out after a certain age.

Many Plan Sponsors, particularly those with plans over $1 billion, realize the value of asset retention, which improves purchasing power and can lead to fee savings. A PLANSPONSOR survey2 reports that half of Plan Sponsors in the over $1 billion category prefer terminated employees with material balances remain in the plan. Plan Sponsors of smaller plans are beginning to take cues from their larger counterparts.

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