Today the SPARK Institute and the Defined Contribution Institutional Investment Association (DCIIA) Retirement Research Center (RRC) published the results of their joint research on privacy, data sharing and security within the retirement and employee benefits industry. The report is the first phase of an ongoing effort to create more effective holistic financial wealth solutions that safeguard plan and participant data.
The industry has long struggled with determining when it is appropriate to share plan and participant data and what data to share in financial wellness services. The recently concluded SPARK/DCIIA research demonstrated that greater alignment is needed among all stakeholders to meet the demand of American workers for more help and advice on retirement savings and financial wellbeing.
“A key component of our research was the joint SPARK/DCIIA Privacy, Data Sharing and Security Workshop held in April 2022,” reported SPARK Executive Director Tim Rouse. The workshop brought together representatives from payroll providers, third-party administrators, recordkeepers, advisors, and other service providers, such as student loans repayment companies, who discussed the merits of increased data sharing, regulatory concerns, and practitioner challenges. “There was some consensus and some conflicts among the members of this diverse group,” Rouse said. “We needed to hear directly from all stakeholders – retirement plan participants, plan sponsors, recordkeepers, and advisors – to better understand their points of view regarding data sharing and privacy.”
As a result, the next step was focus group research to capture the many viewpoints across the defined contribution plan ecosystem. “We found both conflicts and contradictions among the various stakeholders,” said Pam Hess, executive director of the DCIIA RRC. “Participants expressed the need for more support from their employers to help them make better financial decisions, not just on how to save for retirement, but how to do so while also addressing other financial hurdles. However, these same participants voiced concerns about the sharing of their employee benefits data for purposes other than to address their specific financial concerns. But they trust that their employers will make the right decisions when it comes to balancing the sharing of data with privacy protection.”
The views of plan sponsors showed similar conflicts and contradictions, according to Hess. “Plan sponsors overwhelmingly expressed ownership of plan data. However, they were not certain whether this ownership role was as a plan fiduciary. In further examinations with plan consultants, most acknowledged that, while plan sponsors expressed strong ownership of plan data, they rarely took the time to get involved in the details on when and how that data was shared.”
“Our initial research made clear that there are opportunities to better align all the stakeholders, but we need to gather more information and continue the conversations to develop the best solutions for the industry and hard-working Americans,” said Rouse. He also announced that LIMRA will join SPARK and the DCIIA RRC to complete the second phase of their joint privacy, data sharing and security research. “LIMRA will be a great member of the team,” said Rouse. “Working together, we’re committed to help the industry conduct the collaborative research needed to find the best path forward.”
On June 7, 2023, SPARK, the DCIIA RRC and LIMRA will kick off the next phase of their research with the second Privacy, Data Sharing and Security Workshop. Part of the two-day DCIIA/SPARK Public Policy Forum, the workshop will bring together participants across the retirement and employee benefits industry to discuss the key issues surrounding the growing needs of personalization and financial wellness, efficiently sharing the data that will support these innovations, and protecting plan and participant data. For a copy of the research or for more information please visit sparkinstitute.org.
For more information, please contact Tim Rouse at email@example.com.
About SPARK Institute
The SPARK Institute represents the interests of a broad-based cross section of retirement plan service providers and investment managers, including members that are banks, mutual fund companies, insurance companies, third-party administrators, trade clearing firms, and benefits consultants. Through the combined expertise of its member companies, the Institute provides research, education, testimony, and comments on pending legislative and regulatory issues to members of Congress and relevant Government agency officials. Collectively, its members serve approximately 100 million participants in 401(k) and other defined contribution plans.
The Defined Contribution Institutional Investment Association (DCIIA) is a non-profit association dedicated to enhancing the retirement security of America’s workers. To do this, DCIIA fosters a dialogue among the leaders of the defined contribution community who are passionate about improving defined contribution outcomes. DCIIA’s diverse group of members include investment managers, consultants and advisors, law firms, record keepers, insurance companies, plan sponsors and other thought leaders who are collectively committed to the best interests of plan participants. For more information visit www.dciia.org.
About the DCIIA RRC
DCIIA’s Retirement Research Center conducts rigorous, industry-informed research that is grounded in a practical approach focused on actionable insights. We adhere to a disciplined research methodology, governance and validation process. Our goal is to serve the industry as a reliable, unbiased, and authoritative research resource supporting improved retirement security–be it through plan design, institutional practices, investment solutions, or behavioral interventions. To learn more, visit: www.dciia.org/RRC.
LIMRA has been serving the industry since 1916, LIMRA offers industry knowledge, insights, connections, and solutions to help more than 700 member organizations navigate change with confidence. Visit LIMRA at www.limra.com.