Record Retention Guidelines

How long do I need to keep that? This seemingly simple question is not always so simple and finding guidance on it can be difficult. Because benefit plans must comply with several regulatory authorities, there can be different requirements for the same document. The majority of plans are required to comply with Employee Retirement Income Security Act of 1974 (ERISA), Department of Labor (DOL) and Internal Revenue Service (IRS) requirements. In addition, plans may also be required to comply with other agencies or state guidelines.

ERISA requires that individual benefit records must be retained as long as a possibility exists that they might be relevant to determining the benefits of a participant or beneficiary. In addition, ERISA also requires that records that support the annual reporting and disclosure must be kept for a period of at least six years after the due date of the form. The IRS has a similar requirement in that records needed to document compliance with the Internal Revenue Code must be retained. IRS Form 990 specifically asks whether or not your organization has a written record retention and document destruction policy.

Although we recommend that you consult with your legal counsel regarding your plan’s precise record retention guidelines, we have developed the following general guidance based on the requirements of regulatory authorities and best practices:

Permanent records:

• Trust document and amendments
• Plan document and amendments
• IRS determination letters
• Meeting minutes
• Collective bargaining agreements
• Form 990 and 990T
• Form 5500
• General Ledger
• Legal correspondence
• Investment guidelines
• Correspondence from regulatory agencies
• Participant records including benefit election forms, etc.

Seven years:

• Bank reconciliations, bank statements, cancelled checks
• Check registers
• Invoices
• Insurance policies and surety bonds
• Payroll records and summaries, including payments to pensioners (Forms W-2, 1099, 941 and 940)

Six years:

• Year end investment statements

Three years:

• Deposit slips
• Expired insurance contracts
• General correspondence

Please note that the above list is not all inclusive but rather shows the most common documents retained by plans.

It is important for all organizations to establish a document retention and destruction policy and to follow it. Under investigation, the IRS or the DOL can require the plan to recreate any records not retained.

By Eric Baertsch, CPA, Senior Manager, ebaertsch@legacycpas.com