(b)lines Ask the Experts – Getting Rid of Old Plan Documentation

“In fact, it appears that just about anything plan-related has been retained since the inception of the plan back in the 1950s! Can we discard some of this “junk?”  

Michael A. Webb, Vice President, Retirement Practice, Cammack LaRhette Consulting, answers:  

As bizarre as it may sound recommending that you retain what you, no doubt lovingly, refer to as “junk”, the Experts would respectfully suggest that your turn your attention to cleaning other areas of your office, and keeping your 403(b) file intact!    

The reason is that the Employee Retirement Income Security Act (ERISA) has a relatively restrictive requirement for retention of plan records with a MINIMUM of six years for all records used in developing required plan reports (such as 5500 annual returns) and plan disclosures (such as Summary Plan Descriptions). In addition, all records used to determine benefits for participants in the plan, now or in the future, must be retained for as long as such records are relevant, which could be as long as a participant’s lifetime, or even the lifetime of his/her beneficiaries!    

Even if it were not a requirement, best practice is to retain plan records for as long as possible, especially in an era of increased participant litigation. Historic beneficiary records, qualified domestic relation orders (QDROs), and prior plan documents/benefits statements have become increasingly important as participants and their ex-spouses, alleged beneficiaries etc. make claims for benefits purportedly earned many years prior.   

Thus, that “junk” pile of old plan records might come in extremely handy someday!