Record Retention Guidelines for Employee Benefit Plan Sponsors

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As we head into “spring cleaning season,” you might be wondering what files you can throw away. Employee benefit plan sponsors have unique requirements when it comes to record retention—read on.

Editor’s Note: This blog has been updated as of April 6, 2022 for accuracy and comprehensiveness.

Do you find yourself with old files and records cluttering the office? If you have an employee benefit plan you may be asking, which records are required to be retained and for how long?

The DOL, IRS, Pension Benefit Guaranty Corporation (PBGC) and Employee Retirement Income Security Act of 1974 (ERISA) have established record retention policies specific to employee benefit plans. As a plan sponsor you are required to keep certain records.

Records to retain include:

• Participant election forms including distribution forms (with spousal consent waivers, if applicable), loan documents, deferral amount and allocation election forms, beneficiary terms and participant notices of election changes
• Employee demographic information (date of birth, date of hire, date of termination, social security number, etc.)
• Compensation information
• Plan and trust documents including the original signed plan document, adoption agreement and all plan amendments
• IRS determination and approval letter
• Any related annuity contracts and collective bargaining agreements
• Trust records, such as investment statements
• Census data and payroll records
• Participant account statements that includes detail of contributions, earnings, loans, withdrawals, etc.
• Form 5500 copies and audited financial statements
• Nondiscrimination and coverage testing results
• Plan Fidelity Bond
• Plan governance records such as minutes or other documents that memorialize the fiduciary responsibilities of the plan administrator
• Actuarial statements and valuations

For electronic documentation to be allowed, the electronic recordkeeping system must meet the following criteria:

• Electronic records can readily be converted to a paper copy
• Electronic records must be in a safe and manageable place and in proper order
• The system has suitable controls to ensure the information is reliable, authentic and accurate
• The system is not subject to a restriction or agreement that may limit the ability to meet an ERISA reporting and disclosure requirement
• There are acceptable records management practices
• Records must be legible and readable when printed or viewed on screen

A written record retention policy approved by those charged with governance is helpful to know when to review, update and discard plan related documents. It is also important to understand the record retention period of the plan service organizations ( i.e., recordkeeper, TPA, investment advisor) for records they retain. When preparing the written policy, consider the records noted above.

Original paper copies can be disposed of after they are in the electronic recordkeeping system. However, if the electronic records don’t establish a substitute or duplicate record under the terms of the plan or applicable federal or state law, the original records should not be discarded.

So how long do you need to keep these records? ERISA requires retention of plan-level records (i.e. Form 5500, trust reports, audited financial statements, all required notices), for a period of at least six years after the document is filed in accordance with Section 107. Under Section 209, ERISA does not provide a specific period of time for participant-level records sufficient to determine benefits due (i.e. participant demographic information, compensation, election forms), therefore, these records should be kept for an indefinite period of time to ensure they are available upon request by the participant or in case of an audit.

Wondering if your recordkeeping is up to par? Reach out to one of our Employee Benefit Plan experts.