Compliance February 19, 2025

The Pension Specialists Breach Exposes Data of 71,000 Participants

The external system breach exposed participants’ names and Social Security numbers.

Reported by

The Pension Specialists Ltd., an independent retirement plan third-party administrator, experienced a data breach about one year ago, exposing the personal information of at least 71,443 people, according to a filing with the office of the Maine attorney general.

Affected retirement plan participants were notified on Friday about the breach. According to a letter sent to those affected, TPS experienced a network disruption on February 24, 2024, and immediately initiated an investigation on the matter and engaged with independent cybersecurity experts.

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The firm determined that certain files may have been accessed or required without authorization between February 18, 2024, and February 20, 2024. The company then conducted a “comprehensive review” of all potentially affected information to identify any personal information that could have been involved. The letter stated that the company determined on December 16, 2024 that personal information may have been exposed.

In the filing to the Maine attorney general, , and described the incident as an external system breach (hacking). There has been no evidence of the misuse, or attempted misuse, of ay potentially impacted information, the letter stated.

TPS has notified affected people that their personal information, including at least names and Social Security numbers, may have been stolen, according to consumer rights law firm Wolf Hadenstein Adler Freeman & Herz LLP, which is investigating the incident.

The TPA is also offering complimentary identity monitoring services through Kroll, including months of credit monitoring, fraud consultation and identity theft restoration. The exact number of months was redacted in the Maine AG filing.

According to its website, Machesney Park, Illinois-based TPS has grown to service more than 1,025 employer retirement plans, with services covering more than 30,000 plan participants with more than $500 million in assets.

TPS did not immediately respond to a request for comment.

Data & Research February 19, 2025

Public Sector Employees More Likely to Stick with Default Retirement Investments

A new report from MissionSquare revealed how demographic and economic factors influence investment decisions.

Reported by

Public sector employees overwhelmingly accept default investment options in their defined contribution retirement plans, with more than 80% of participants across all age groups opting to remain in the default selection, a new study from MissionSquare Research Institute found.  

“Default Investment Acceptance Among Public Defined Contribution Plan Participants” examined how demographic and economic factors influence investment decisions. 

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When employees are enrolled in a DC retirement plan, they are automatically placed into a predetermined investment lineup, typically a target-date fund or a stable value fund. While some participants choose to customize their investment allocations, the majority stick with their default selection for years. This emphasizes the importance of well-designed default options in securing retirement outcomes, according to MissionSquare’s report. 

Acceptance of default investments declines with age and income, according to the report. Younger, lower-income participants exhibit the highest acceptance rates, with 97% of new enrollees in these demographics sticking with default options. In contrast, older, higher-income participants have the lowest acceptance rate: 69%. 

Female participants are more likely to accept default investments than male participants, with the most significant differences occurring at higher income levels. The study also found that economic downturns influence default investment decisions, particularly among older participants.  

During the volatility caused by the COVID-19 pandemic in 2020, default investment acceptance rates among those aged 60 to 70 dropped to about 50% from nearly 90%, while younger participants’ investment choices remained stable. 

Public sector employees who initially accept default investments rarely change their allocation, with an opt-out rate of only 1% per year. However, opt-outs are more frequent among older and higher-income participants. 

The study emphasized the need for public sector retirement plan administrators and advisers to carefully design default investment options to support long-term retirement security. 

“Since public sector DC plan participants are more likely to accept and stay within default investments, plan administrators and advisers should take more responsibility/actions for designing default options that would better facilitate participants making appropriate saving and retirement planning decisions,” the report stated.  

Moreover, MissionSquare’s analysis suggested that strategies to encourage participants, especially those who initially opted out, to periodically reassess their default investments could help optimize retirement outcomes. 

The study examined data from approximately 340,000 newly enrolled public sector DC plan participants between 2020 and 2023, primarily focusing on those using target-date funds as default investments, with some plans incorporating stable value funds. 

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