What a Presidential Race Teaches Us About Records Retention

January 5, 2016 | Authored by Dopkins Assurance Services Group


January 5, 2016 – With America on the cusp of a presidential race, 2015 was a year filled with controversy and debate surrounding the long list of candidates. Hillary Clinton has been a popular name in the news with the recent disclosure of her use of a personal email server. Whether or not we find this to be an issue relevant to her running for President doesn’t exactly correlate with this discussion of good record retention strategy.  However, the surrounding circumstances such as messages supposedly being deleted, the potential for classified information being leaked, and government policy over emails having been arguably violated brings up an issue that is hopefully important to you as a well-organized and efficient professional.  Knowing the policies and government mandates relevant to your industry regarding record retention is an important step in developing a process you can easily follow and maintain.

With all of that said, strong record retention controls are equally important in making sure you are aware of what you can dispose of, and when. The shift to paperless record-keeping has provided us with the ability of holding on to more data than we may have kept had they been paper copies.  And with the introduction of solutions that are cheaper than ever before, such as “the cloud” and hard drives with continuously greater capacities, we will only continue to stockpile more data… because why not?

A case for de-cluttering

The idea of spending significant hours and manpower doing a full review of your internal records may sound daunting if your document retention system is unorganized.  Our experts, the Dopkins Systems Consultants, agree that the time spent each year or so trying to figure out what to keep or delete may be more costly than just keeping everything.  However, removing the inefficiencies of your data organization can save you and your company huge amounts of time and frustration in the long run.  The annual process of disposing of unnecessary items that could expose you to additional liability should require little effort and time, once you have established a system that is well-indexed and easy to follow. Here are just a few areas where we can help:

Benefit plans

Benefit plans in particular can be susceptible to lawsuits and issues between the Plan sponsor and participants.  Awareness regarding which records you do and do not need to have available in the unfortunate case of a lawsuit can help ensure you do not expose yourself to unnecessary liability.

The Employee Retirement Income Security Act

(ERISA) mandates the length of time you are required to retain employee records for benefit plan audit purposes.  ERISA Section 107, for example, requires that you keep records used in preparation of governmental reports (such as Form 5500 and Form 1099-R) be preserved for at least 6 years.  In addition, The IRS has also released information that explains the different “periods of limitation” for tax returns, meaning the length of time after a return has been filed in which it can be amended for additional refunds or tax (generally three years with many exceptions).

To keep or not to keep …

So why hold onto records from 1995 if you don’t need to?  There is undoubtedly time to be saved; time better spent learning the laundry list of candidates running for President, perhaps! Contact your Dopkins Assurance Services Advisor to help you reap the benefits of transforming your record retention policy into a well-oiled machine!


About the Author

Dopkins Assurance Services Group

Dopkins offers a full range of assurance services that can help improve your financial accuracy. From financial report preparation and audits of historical financial statements to preparation of an array of special attestation reports—we can help translate numbers into accurate management information so you can make knowledgeable decisions. For more information, contact Bart McGloin, CPA, CFE, CFF at bmcgloin@dopkins.com.

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