I’m always asked about how long plan sponsors keep records and there is one thing plan sponsors should never throw out, their plan documents.
While most records can be thrown out after 7-8 years, plan sponsors should never get rid of their plan documents including documents from the initial implementation even if it was 30 years ago. When it comes to audit, plan termination, or some other issue, you never know when the Internal Revenue Service may ask for a plan document from yesteryear. If you don’t have the plan documents that you’re supposed to have, the assumption is that it was never drafted and you have a huge compliance problem that could lead to some severe financial penalties.
I just came across a plan that might not have had their plan documents restated since 1999. Maybe the documents were restated, maybe they weren’t. I’m not a betting man, but I always assume they weren’t done. It’s going to cost this plan sponsors thousands and thousands of dollars to correct this.
So while you may want to spring clean your plan files, never get rid of any types of plan documents. As far as valuation reports, participant records, and beneficiary forms, invest in a good scanner and network drives.