You have two types of records to retain – plan records and employee participation records. Many of the plan records, such as Form 5500, fall under the rule of holding for six years after the filing date of the documents based on the information which they contain, or six years after the date on which such document would have been filed but for an exemption. The supporting documents for your plan that you must keep for six years include: worksheets, vouchers, receipts, and applicable resolutions. Having these documents fulfills ERISA Code 107.1027, which states that the information may be required to verify, explain, or clarify information about the plan.
Plan records that must be kept indefinitely include: the original plan document and amendments, summary plan descriptions and modifications that you provided to plan participants, ownership and asset documentation, and the IRS determination letter (most current).
Employee records, according to ERISA 209.1059, must be maintained to determine benefits due or which may become due. This is where the burden falls, because an employee in his or her 20s will not retire for 40 or more years. Be sure to keep the applicable dates for hire, termination, re-hire, and retirement. Also keep number of years of service or hours worked, plan distribution dates and amounts with supporting documentation, spousal consents, Forms 1099 and W-4P. Because the employee records will likely be stored electronically, the DOL requires electronic copies to be easily convertible to paper, have safeguards to retain accuracy, and have the ability to index, retrieve, and preserve the records. You may dispose of the paper records when you meet the electronic requirements.
If you have any questions about record retention, please contact Dalton Cox.