Will your Recordkeeper Reimburse Losses Due to Fraudulent Activity?

January 4, 2022

Following the EquiFax data breach affecting 143 million U.S. customers and the disclosure that the 2013 Yahoo data breach affected 3 billion customers, plan sponsors and participants are asking whether their retirement account balances are protected against unauthorized activity. As a plan fiduciary to our clients, Centurion Group recognizes the importance of ensuring that participant accounts are maintained securely, with protections in place in the event of fraud.

Some Firms Offer Written Guarantees to Reimburse.
A number of the largest retirement service providers offer a written online security guarantee to participants. All are subject to certain conditions, including that participants regularly review their accounts, maintain the security of their password and immediately report any suspicious account activity. These conditions do not appear to be overly burdensome or designed to avoid reimbursing participants.

Other Firms Do Not Provide Guarantees.
While the number of firms offering fraud protection is growing, these written guarantees are not universal among retirement plan service providers. While most recordkeepers reimburse participants when unauthorized activity causes account losses, Centurion believes that plan fiduciaries and participants are in a far better position when written protections are in place. Centurion helps plan sponsors assess the extent to which their plan and participant balances are protected against losses due to cybersecurity breaches.

Call Centurion Group for assistance in reviewing your plan’s cybersecurity protections.