Cybercriminals are now targeting retirement accounts, and there's no guarantee it may be recovered.
According to Senior Director of the Federal Consumer Programme for the United States Public Research Interest Group, Mr. Ed Mierzwinski, he said it's an issue to be aware of as cyber attacks on retirement funds rise.
Mierzwinski said: "Hackers are finding it's getting harder to hack bank accounts, so they're saying where else is there more money? So, they have started to discover 401(k) accounts and retirement funds."
A 401(k) accout is a retirement savings account that allows an employee to divert a portion of his or her salary into long-term investments.
At a 2019 forum for institutions involved in retirement planning, industry expert Larry Goldbrum of Reliance Trust, said that while overall cyber fraud and account fraud was down, cyber fraud amounted to $14.7 billion in 2018; fraud in retirement accounts was rising, according to a report by the National Association of Plan Advisors.
Also, Chief Executive Officer of Financial Services Information Sharing and Analysis Center, Steven Silberstein, said cybercriminals today are looking for any possible route into people's financial transactions, and they are increasingly focusing their efforts outside financial institutions' firewalls.
Silberstein explained: "E-mail compromises, spear phishing and social profiling are some of the key tactics being used to target all types of assets, including retirement accounts."
He added that in spear phishing, cyber bandits send emails, purportedly from a known or trusted sender, in the hope of persuading potential victims to reveal confidential financial information.
But, an Irish-domiciled global multinational risk management company, Willis Towers Watson has the view that over 80 percent of cyber frauds and crimes is probably preventable through common-sense practices and comprehensive information security training for operatives and staff.
Director in the firm, John Norris advised that Trustee directors also have an individual role to play by adopting good practice.
He said: "Generally, trustees should exercise caution and be able to spot signs of malicious software attempts and social engineering risks."
What is Nigeria doing?
Pension management expert, MD of IEI-Anchor Pension Managers Limited, Mr. Glory Etaduovie, is of the view that ongoing data recapturing exercise of pension contributors and retirees by the Pension Fund Administrators, PFAs, nationwide is capable of protecting pension clients against cyber crimes and other fraudulent intents.
Speaking recently on a paper titled: 'National Data Base Harmonisation and Pension Data Recapture,' Etaduovie said that the National Pension Commission, PenCom has been upbeat about data recapture of its existing clients and the streamline of future contributors registrations in a move to have accurate database of its clients.
He believes the exercise will get pension operators prepared for more international best business practices, standardisation and acceptability globally.
Etaduovie said: "A correct database is thus inevitable. It would be a sad and embarrassing thing for a retiree and the pension industry to find out that through a stolen identity, there was no more funds left in the RSA account."
Tips to make hacking harder:
*Protect your devices: Make sure any computer or device used to access accounts is protected by a firewall has current anti-virus and anti-spyware software.
*Beware of fishy emails: Be wary of responding to opening attachments in or clicking on links in emails that ask for your financial information
*Read your snail mail: Check paper statement from your mutual fund or money manager for accuracy and notify them promptly if there's been unauthorised activity.