How long do we have to keep retirement plan records is one of those questions that plan sponsors ask when they start to run out of file cabinet drawers. They’re familiar with their reporting and disclosure obligations that they have under ERISA, but ERISA also requires that plan sponsors retain the records that support the information included in the 5500 filing and other reports for a specific period of time. So exactly how long should plan sponsors retain plan records? As with all things ERISA, there is the legal part and the practical part. Here’s both.
The legal part of the answer is that all plan-related materials should be kept for a period of at least six years after the date of filing of an ERISA-related return or report. The records should also be preserved in a manner and format (electronic or otherwise) that permits ready retrieval. All records that support the plan’s annual reporting and disclosure should be retained.
While many plan sponsors retain firms like ours to provide certain reports and prepare the 5500 filing, the plan administrator remains ultimately responsible for retaining adequate records that support these reports and filings.
And now here’s the practical part of the answer. While plan documents and records should be kept for a period of six years after the date of the filing to which they relate as discussed above, best practices would be to keep certain records for the life of the plan. If a plan sponsor has to respond to an inquiry from a government agency or a request for information from a plan participant, a thick paper trail makes it easier to respond.
And with the new tax laws, retirement plans are not only getting older, they can get better.