Document Retention Best Practices for Employee Benefit Plans

August 12, 2020 – One area that is frequently challenging for Plan Administrators is determining which plan records should be retained and for how long. Section 107 of the Employee Retirement Income Security Act of 1974 (ERISA) requires records for benefit plans used to support plan filings to be retained for a minimum of six years after the filing date. These records include the Form 5500, compliance testing results, employee communications, financial reports and related supporting documents, fidelity bond coverage, and income tax returns. Section 209 of ERISA requires an employer to retain records used to determine benefits, as required by the Department of Labor (DOL). The DOL regulations issued in 1980 indicate that participant benefit records should be retained “as long as a possibility exists that they might be relevant to a determination of the benefit entitlements of a participant or beneficiary.” These records include Plan documents and related documents, census data and supporting documentation, participant account records, supporting documentation for loans and distributions, Board or Administrative committee minutes, and Trust documents.

There are certain best practices for proper document retention in regard to employee benefit plans. These include creating a written document retention policy for the organization, and ensuring the policy is followed consistently, as well as properly categorizing and organizing records so that they can be easily recovered.

While following proper document retention procedures, Plan Administrators should also be aware of the need to protect personally identifiable information (PII) and protected health information (PHI). Best practices include reducing paper documentation and increasing encrypted electronic information, as well as only retaining necessary documents and destroying unneeded PII. These actions reduce susceptibility of this sensitive data.

This article is an excerpt from Dopkins Employee Benefits Newsletter.  To read the complete content, please click here.

For more information, please contact Chrissy Schmitt at cschmitt@dopkins.com.

About the Author

Christine D. Schmitt CPA

Chrissy performs audit and review services for industries ranging from Non for profit to manufacturing. She is a graduate of the Amherst Chamber of Commerce Emerging Business Leaders program.

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