Many say it would have been nearly impossible for multiemployer benefit funds to prepare for a pandemic as serious and widespread as COVID-19. However, having a comprehensive disaster recovery plan that addressed infectious disease in place prior to the pandemic would have supplied, at the very least, a template of a plan to help funds continue to provide benefits without delay to all participants.
In their article “It Is Time to Update Your Disaster Recovery Policy” in the November issue of Benefits Magazine, authors Stephen J. O’Sick, CEBS, and Lawrence R. Beebe explain that many funds either do not have a disaster recovery policy or have not recently updated their existing policy.
O’Sick, who is the fund administrator of the Bricklayers and Allied Craftworkers Local No. 2 New York Pension, Annuity and Health and Welfare Benefit Funds in Albany, New York, and Beebe, a partner with the Bethesda, Maryland accounting firm of WithumSmith+Brown PC, provide some considerations for trustees when developing a policy. They say a policy should fulfill the following goals.
Prevent or mitigate the disaster. Prevention may be impossible in cases of an environmental disaster or a pandemic like COVID-19, but it is possible for events such as cyberattacks.
Limit the extent of interruption, disruption and damage. For example, funds that had a plan for remote work could quickly get operations up and running during the COVID-19 pandemic.
Minimize recovery cost. It can be expensive to establish a comprehensive disaster recovery plan, but the recovery costs of not being adequately prepared for a disaster can be significantly greater than these costs of preparing for a disaster.
Establish alternative business operations. For example, many funds have not had access to their offices for months during the pandemic.
Train personnel. Everyone in an organization should be trained on the responsibilities they will have when a disaster occurs. To perform these responsibilities well, employees should receive regular periodic training on those tasks.
Restore normal operations. Plan personnel should be aware that the resumption of normal operations after a disaster may involve a new normal. Lessons learned from the disaster may require the fund to implement new steps and/or techniques.
Continue to provide all benefits to all participants without delay or as soon as possible. Trustees are responsible for providing timely benefits to all participants and beneficiaries.
O’Sick and Beebe also supplied a template of a disaster recovery policy.
The COVID-19 pandemic should teach employee benefit plans many valuable lessons, O’Sick and Beebe write, including that a disaster can happen to any organization and its effects can be long lasting. Therefore, it is critical for any organization to develop and maintain a disaster recovery policy.
Looking for other employee benefits sample documents? Visit the International Foundation Sample Documents center.
Kathy Bergstrom, CEBS
Senior Editor, Publications at the International Foundation of Employee Benefit Plans
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