Record Retention For Retirement Plans

A Retirement Plan, by its very nature, requires large amounts of documentation, as well as the need to store and access certain information. 

Thus, a record-retention policy should be established that addresses both paper documents and electronic transactions. Plan documents and amendments should be kept for the life of the plan.  One never knows when the plan sponsor might get sued by a disgruntled participant and have to prove compliance. 

A well-designed document retention system that allows responsible parties to periodically review, update, preserve, and dispose of documents in a rational and organized fashion fosters good administration and enables the plan to better "meet compliance requirements". 

Many plans will store data used for testing and testing results in electronic form.  This will allow for easy backup and be space and cost efficient.  Plan documents, amendments, and participant communications are often kept off-site in secure and fireproof areas. While managing these records, it is vital to ensure HIPAA standards are met for any protected health information included in benefit files.

Some documents must be retained for the life of the plan, while others may be disposed of after six years. 

The plan administrator should keep the following plan-related materials for a period of at least six (6) years (although note that records necessary to determine benefits due employees should be kept longer than six years):

• The plan document, properly dated and signed, along with any corporate action taken to adopt the plan and all dated and signed plan amendments, with all dates and signatures easily visible
• Copies of all corporate actions
• Copies of all correspondence to and from the Plan Administrator
• Copies of all communications to employees, including summary plan descriptions and other plan-related communications, including copies of videos, slides, and e-mails used to promote the plan
• A copy of the most recent determination letter from the IRS, if any
• All financial reports, including trustees' reports, journals, bank statements, brokerage account statements, ledgers, certified audits, investment analyses, balance sheets, and income and expense statements
• Copies of Form 5500 and all schedules and attachments
• Payroll records used to determine eligibility and contributions, including details supporting any exclusion from participation (It is critical that sponsors keep complete census data, not just data on those who are eligible.)
• Participant hour of service and vesting determinations
• Plan distribution records
• Corporate income tax returns (to reconcile deductions)
• Evidence of the plan's fidelity bond
• Documentation supporting the trust's ownership of the plan's assets
• Copies of all documents relating to plan loans, withdrawals, and distributions, including copies of spousal consents
• Copies of nondiscrimination and coverage test results
• Any other plan-related materials, such as claims against the plan

Administrative Tip: An annual audit of all plan-related records can be useful in order to ensure that complete and accurate records are being retained and that the plan is operating in accordance will all written policies and procedures.