Maintaining an employer-sponsored retirement plan can be an onerous task. With Basic Plan Documents, interim amendments, required restatements, Summary Plan Descriptions, enrollment and beneficiary forms, and federal forms it’s easy to see just how much paper a Human Resources department can accumulate in short order. Before you go off and shred some of those old documents in an effort to clean up your fiduciary file, you should know that the Employee Retirement Income Security Act (ERISA) has specific requirements for the retention of records relating to employee benefit plans.
How long you must keep these important records depends entirely on the specific document in question. As a general rule, plan related documents fall into two broad categories: Reporting & Disclosure Records and Benefits Determination Records.
Documents that fall under the Reporting & Disclosure Records category generally must be retained and kept available for examination for at least six years. This would include: agency filings such as Form 5500; IRS determination letters; Summary Plan Descriptions and Summaries of Material Modifications; and participant benefit statements.
Benefits Determination Records, on the other hand, have a much broader and open-ended retention requirement. ERISA states that employers must maintain benefit records sufficient to determine the benefits due or which may become due for as long as they may be relevant to a determination of benefit entitlements. Documents that fall under the Benefits Determination Records category include: age and service records used to determine eligibility, vesting, breaks in service, and benefits; payroll records; beneficiary designations; plan documents and amendments; trust documents; and custodial agreements.
The table below will help summarize the retention requirements for the most common fiduciary records. One final thought: When in doubt, retain! Whether you prefer the nostalgia of paper records or the easily accessible nature of electronic records, an exhaustive fiduciary folder containing your important plan-related records will never go unappreciated.