Here’s one of those ERISA answers: It depends.
First, there’s the so-called 6-Year Rule Answer. It requires all plan-related materials that support the plan’s annual reporting and disclosure to be retained for at least six years after the date of filing of an ERISA-related return or report, or from the date of any extension. These materials should be preserved in a manner and format (electronic or otherwise) that permits ready retrieval.
Then, there is the Best Practices Answer. How long is that? Forever.
This means that certain records should be kept for the life of the plan. This would include all plan documents dating from the plan’s inception. The thicker the paper trail (or digital copies), the easier it will be for the plan to respond to an inquiry from a governmental agency or a request for information from a plan participant.
Most recently, the Internal Revenue Service requested specific employee records from a client going back 10 years during a plan termination process. Fortunately, the employer was able to provide it.
In addition, the Department of Labor requires employers to maintain records sufficient to determine the amount of benefits accrued by each employee participant. In the case of pension plan, this means an employee’s compensation and service as a plan participant.
While many plan sponsors retain firms like ours to provide certain reports and prepare the 5500 filing, the employer usually is the party ultimately responsible for retaining adequate records that support these reports and filings.
Much better to have the records than have the regulatory agencies help the employer reconstruct them.
This article should not be considered legal or tax advice. Taxpayers should always consult with their tax advisors on the application of the tax laws to their specific situation.
Jerry Kalish is an EBA Advisory Board member and President of National Benefit Services, Inc., a Chicago-based third party administrator. He is a Guest Lecturer at John Marshall School of Law LLM Program in Employee Benefits and serves on the Great Lakes IRS Advisory Council for Tax Exempt and Government Entity Plans. Jerry has been publishing The Retirement Plan Blog since 2006. He can be reached via email at firstname.lastname@example.org and followed on Twitter
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