Diversions February 25, 2016

Willing to Disclose Data for the Right Deal

Trading personal information for discounts is generally viewed as acceptable, but many are leery about data breaches, spam and over-profiling.
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Depending on the deal offered and how much risk they face, many Americans say they might provide personal information, according to a Pew Research Center study. Some accept this tradeoff as a part of modern life, and others are hopeful that technological and legal solutions can be found.

Nearly half (47%) say the basic bargain offered by retail loyalty cards—namely, that stores track their purchases in exchange for occasional discounts—is acceptable; a third (32%) call such an arrangement unacceptable. About 20% say it depends on the deal. And most Americans think it acceptable for employers to install monitoring cameras in the wake of a series of workplace thefts.

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Still, while many Americans are willing to share personal details in exchange for tangible benefits, they are often cautious about disclosing their information and frequently unhappy about what happens to that data once companies have collected it.

Shown a scenario in which they might save money on their energy bill by installing a smart thermostat that would monitor their movements around the home, most adults surveyed consider this an unacceptable tradeoff (by a 55% to 27% margin).

Privacy tradeoffs raise issues such as the likelihood of getting spam, the risk of data breaches, the special intimacy tied to location data and overdone customer profiling. Survey respondents expressed concerns about the safety and security of their personal data in light of numerous high-profile data breaches. They also expressed anger about the barrage of unsolicited emails, phone calls, customized ads or other contacts that inevitably arises when they elect to share some information about themselves.

Respondents’ interest and overall comfort level depends on the company or organization and how trustworthy or safe they perceive the firm to be. Comfort levels also hinge on what happens to their data, especially if third parties enter the picture.

Among hypothetical scenarios most respondents found acceptable were office surveillance cameras and online health-care information sites shared by doctors. Scenarios unacceptable to most respondents included devices for insurance companies to driving speeds and location, and a social media site collecting real information and photos for class reunions.

Compliance February 24, 2016

DOL Investigating DB Plan Payment Practices

Your DB plan sponsor clients should start reviewing their payment practices now, attorneys tell PLANADVISER.

 

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The U.S. Department of Labor (DOL) is rolling out an initiative focused on the investigation of benefit payment practices of the defined benefit (DB) plans of a number of Fortune 500 companies, according to a client alert from Morgan Lewis & Bockius LLP.

The investigations are concentrated on plan procedures in three key areas: (i) locating missing participants, (ii) informing deferred vested participants that a retirement benefit is payable, and (iii) commencing benefit payments when the participant reaches age 70½.

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The DOL hasn’t made a formal announcement of the initiative, but Robert L. Abramowitz, with Morgan, Lewis in Philadelphia, tells PLANADVISER some DOL employees have mentioned it when speaking at events, with one speaker saying the efforts started in Philadelphia and will be expanding. ”I wouldn’t be surprised if at some point the DOL makes this formally known,” adds Matthew H. Hawes, with Morgan, Lewis in Pittsburgh.

As to how the DOL is advancing its initiative, Abramowitz says several clients have been subpoenaed for information and one client received an audit notice. He adds that the DOL is not picking DB plan sponsors at random; a DOL spokesperson said the agency is tracking Form 5500s and looking for DB plans with large numbers of deferred vested participants, which, Abramowitz says, tends to be bigger, older companies.

NEXT: Suggestions for DB plan sponsors

Hawes says not every DB plan has a problem—some do participant searches regularly—but it’s not a bad idea for DB plan sponsors to make sure they are following procedures and complying with the law regarding making payments.

“What we tried to communicate in the client alert is plan sponsors should get in front of the issue,” Abramowitz says. “If they don’t find out there’s a problem until the DOL comes, they won’t have sufficient time to address it.”

Hawes points out that the Internal Revenue Service (IRS) letter forwarding program is no longer available, but the IRS suggested plans should use formal locator services—companies that will help locate participants and demographic data through public records—or use the Internet.

Abramowitz adds that he’s seen businesses cleaning up data for a lump-sum initiative have success by asking individuals’ former colleagues for demographic or address information.

If a plan sponsor gets a subpoena or audit notice, Abramowitz suggests it should start collecting data. If data is not readily available, start a conversation with the DOL investigator about whether requested information can be narrowed based on a particular or whether an extension can be granted to gather data.

While Abramowitz doesn’t think it is necessary for plan sponsors to go through an attorney to interface with the DOL, Hawes says many clients feel more comfortable with that.

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