Benefits March 21, 2007

Hackers Swiping Retirement Accounts

March 21, 2007 (PLANSPONSOR.com) - If you travel - or you have participants who do - and access retirement accounts online while on the road, those accounts may have been targeted by hackers, according to a news report.
Reported by

ABC News is reporting that cybercriminals are hacking their way into accounts and looting 401k and online stock trading accounts, citing comments from officials at the Federal Bureau of Investigation and the Securities and Exchange Commission. The report says that in many cases workers have had their user IDs and passwords stolen when they use computers at hotel business centers and other Internet connection points.

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Keystroke Tracking

“You could wake up one morning and find all your money in your retirement account or in your trading account is gone,” said John Reed Stark, Chief of Internet Enforcement at the Securities and Exchange Commission. The FBI says the criminals bug those computers in the business resource centers with programs to record every key typed. That kind of keystroke recording was recently at issue in a case involving the Federal government’s own Thrift Savings Plan (see Hackers Make Off with $35,000 of TSP Participant Money ).

In addition to the Russian rings, authorities have also seen hackers in India, Hong Kong and Malaysia going after similar online accounts, according to the report. Victims have included customers of E-trade, Scott Trade, Ameritrade, Fidelity, Merrill Lynch, Charles Schwab and Vanguard.

As part of an ABCNews.com investigation, a Russian speaking ABC News intern logged on to a Moscow-based hackers forum and was offered the user IDs and passwords of six U.S. trading accounts – worth about $100,000 – for a cost of $350. A transcript of the transaction is online at http://abcnews.go.com/WNT/print?id=2966583

Avoiding Trouble

The FBI’s Henry offered the following advice to avoid becoming a victim of such Internet theft, according to ABC News:

  • Always use a trusted computer when conducting financial transactions.
  • Going into a hotel or an airport or an Internet cafe, assume you may be at risk.
  • Closely scrutinize reports from your online trading firm to make sure the reported trades are ones you authorized.
  • Frequently change your password and when traveling, consider using a special program that will change your password every 10 seconds.
  • Make sure your own computer has anti-virus protection.

A video report is online at http://blogs.abcnews.com/theblotter/2007/03/russian_crimina.html

Benefits March 20, 2007

Auto Tools Increasing Participation and Savings Rates

March 20, 2007 (PLANSPONSOR.com) - Automatic enrollment, automatic deferral increases and lifecycle funds are increasing participation and savings rates, according to a retirement trends report by The Principal Financial Group.
Reported by

Among the results of The Principal’s research of 30,000 full service plan sponsors and 2.4 million participants, was that the average participation rate is 6% higher in defined contribution plans that offer automatic enrollment.

Three-step easy enrollment methods also increase participation rates. The report said that in 2005, plans that used The Principal’s Easy Enrollment increased their participation by 3%.

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Both deferral rates and participation rates were also higher among those DC plans using one-on-one retirement plan assistance services. The average deferral rate and participation rate for plans using such services were 7.5% and 73.3%, respectively, compared to the 7.1% deferral rate and 68% participation rate for other plans.

Offering higher matching contribution rates seemed to also stimulate retirement savings among participants. According to the report, participation rates increased by 12% as employers moved from a 25% company match to a 100% match, and participation rates are higher for companies offering a 100% match versus companies offering no match.

The report also revealed that 70% of plan sponsors offered a lifecycle investment option in 2005 – a significant increase from 2004, when less than 40% of sponsors offered lifecycle funds. By the end of 2006, more than 80% of plan sponsors were offering lifecycle investment options. Additionally, t he number of plan sponsors using a lifecycle investment option as their retirement plan ‘ s default investment option nearly tripled in 2005 from the previous year.

For the full report go here .

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