News of commercial database hackings involving personal
information seems all too common. While many of these stories focus
on bank and credit card accounts, many plan sponsors and
participants do not realize that 401(k) plan assets may also be at
risk. This can be a problem not only for participants, but sponsors
as well. While no sponsor wants to see participants sustain
financial hits, depending on how a cybertheft unfolds, sponsors
could be left holding the bag.
Importance of monitoring
Sponsors should not only take precautions from their end, but
regularly educate and warn participants about safety measures that
they should be taking. Participants' infrequent monitoring of
what is happening in their 401(k) accounts could make these
accounts vulnerable. Indeed, sometimes participants are even
encouraged to not worry about short-term fluctuations and
volatility in their retirement accounts, and instead focus on the
long run.
