PLANSPONSOR - October/November 2019 - 51

old-must be kept. According to ERISA
Section 107, which lays down the record
retention requirement, employers must
hold past fiduciary plan documents for
at least six years from their filing date.
Should an audit occur, possessing signed
plan documents can shield sponsors
from penalties.
If a plan is inspected, employers
should retain documents even after the
audit is complete. " Plan sponsors should
try to keep all documents as long as the
plan is open, and after the audit period
ends, " says Ferenczy.
Besides to comply with government
regulations, sponsors should retain older
plan documents to provide a history of plan
provisions; these documents are essential
to the plan administrator if a participant
has a legal issue with the plan, Beasy says.
If a plan administrator has a question
about the current retirement plan, former
documents-e.g., restatements or a notice
acknowledging errors in financial statements-can
settle inquiries.
" If you have a restatement or old
documents, you may want to keep them in
case you have old plan provisions you need
to look up, " says Beasy. However, if after
six years there is nothing in the current
plan that relates to the older documents,
then sponsors may dispose of them. " If
you don't have anything plan-related
that's currently affecting anyone, in the
old documents, you probably don't need to
keep them any longer, " Beasy says.
Should participants come to their
employer with questions about previous
plan documents-e.g., about a change
in the SPD-sponsors will want to have
those documents readily accessible-
whether a local hard copy or an electronic
version. " You need to be able to
show changes from the beginning, " says
Ferenczy. " If you don't have plan documents,
then you won't know. It's critical to
be able to demonstrate that if a participant
were to come to you. "
Thanks to the rise in electronic
storage, sponsors are not left to stock
numerous plan document copies in their
filing cabinet, should the Department
of Labor (DOL), IRS or a participant
request a duplicate. Most employers will
want to transfer documents to electronic
recordkeeping services. The employer
simply scans the file and uploads it to
the intended database or service it plans
to use. If a government agency or an
employee asks for a copy, administrators
can conveniently and cost-effectively
make one available.
" Electronic storage is usually the
easiest method, " Beasy concurs. " Same
thing with email, if a participant needs a
copy of a previous email, it's pretty simple
to send it to them. "
provisions or employer contributions
for different locations, due to a company
merger, for instance. "
As to keeping documents current,
Ferenczy stressed the importance of sponsors
modifying their plan documents
should any changes occur. " If you put it
online, you want to make sure these are
the latest documents, " she says. While
most employees will get the answer they
need from the SPD, sponsors have to
remember to update the document or
create a summary of material modifications. "
Material modifications focus on
benefit changes, including establishing
new benefits or eliminating existing ones.
" If you don't have anything
plan-related in the old plan
documents that's currently
affecting anyone, you probably
don't need to keep them ... "
To ensure participants receive plan
documents in a timely matter, sponsors
need to regularly update their electronic
storage services to reflect the current technological
landscape. If their storage platform
was recently revised, they will want
to keep these services up to date. Doing so
minimizes compliance matters and security
issues, plus increases timeliness.
Another reason to store certain
documents might be the idiosyncrasies
of the plan. If a document has distinctive
plan provisions, such as a unique
employer contribution for a certain office
location, employers will have to regularly
monitor and keep separate versions of
forms up to date.
If the plan for one site location in a
company varies from its other plans, the
sponsor might only send the employee the
SPD or other pertinent document for that
location, explains Beasy. " There are times
when you can have different matching
Older plan documents may be kept
as paper copies, with at least one or two
readily available for the plan sponsor and
service providers such as the recordkeeper
and the financial adviser. In fact, working
with an adviser can encourage employers
to keep their documents in order, says
Ferenczy, as many advisers help their plan
sponsor clients implement best practices.
" Plan sponsors should be encouraged
to work with their adviser, to go through
their plan documents, because it will help
with their compliance, " Ferenczy says.
Just remember to mail a signed copy
of any final documents to the adviser or
service provider, Beasy says, in case they
forgot to keep their signed copy.
" It's key to make sure both the
service providers and the plan sponsor
have a copy of the signed documents, "
Beasy says. Being sent one in the mail
helps ensure they do not throw it out.
-Amanda Umpierrez
PLANSPONSOR.com October - November 2019 51
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