historical records

[Guest HRrep]

How much historical recordkeeping information should a company keep for participant distribution. I have a participant that would like to know the exact date of his distribution. Since then we have a new recordkeeper and the data is not available?

I was able to give him a copy of his statement but it did not provide the correct information.

[Guest Bandb]

I'd tell him to find his check and look at the date on it, or ask his rollover institution when the money was received. The participant must have some responsibility to keep up with his own money once it leaves the plan.

[rcline46]

Where is your trust accounting? Forget the service provider, that information is required for trust accounting and the trustees are responsible for it as fiduciaries, not some TPA.

Your plan records unfortunately need to be kept forever, or at a minimum 30 years. There is NO guidance on record retention from anyone!

[Guest Bandb]

I don't dispute the need to retain the records (or access to the records) for a long time.

To change the initial question a bit, are there requirements with regards to responding to former participants who pose such questions?

My experience has been that the records can be retrieved in response to a DOL or IRS inquiry, but that a request from a former participant may not warrant the research required to find the answer.

[rcline46]

Your question seems valid on the surface. In fact our firm has had many discussions on it. First - how do you KNOW they are a FORMER participant? Only research can tell you this, and the research will tell you what happened.

If you stonewall, the participant (ok, former particpant) calls the DOL and says you stole his benefit! Back to research, only now the DOL is involved and could audit! Bummer.

[GBurns]

Bandb,

When a payee receives a check they usually endorse it and either deposit it or cash it. Once that is done the check is no longer in their possession.

How would someone do what you suggested of looking at the check that they received a few years before?

Please tell how?

Also the date of distribution is not the same as the date of receipt of the distribution, nor the date of a subsequent rollover or deposit. The ex participant might well know the date that they deposited the distribution or could ask the rollover institution, but that was not the question. The question was date of distribution.

[Guest shafter]

On my way to something else, the 401(k) Answer Book states plan records must be maintained for at lease six years per ERISA 107, 209. Not having read the sections not sure if there is enough information there to resolve the question.

[Guest Bandb]

GBurns,

My answers came from the perspective of a plan administrator not wanting to waste time on fruitless or needless research for someone to whom he may have no obligation.

Given those responses, I don't see any need to determine a date of distribution from a date of deposit. If you don't need to do the work in the first place, you certainly don't need to determine which type of date it was.

As far as not having the physical check, I would say basically the same thing. My point of view is that this is not the plan administrator's job - let the participant do *some* research before the employer takes time. If the participant can narrow a records search down to a particular week, month, or even year, it may move the process along.

I realize that there are costs and benefits to this approach - the major cost being a perturbed participant who may contact the IRS or DOL.

[GBurns]

You totally missed the point.

The ex-participant has no check, therefore it is impossible to do what you want them to do.

To not want to do something because you might not have an obligation is dangerous. You first determine if you have an obligation then take action, not the other way around.

Your second paragraph was not understandable.

[Guest Bandb]

GBurns:

I believe I qualified several responses by saying either (1) that I know that records must be kept a long time, or (2) that I realize that there are costs and benefits. Your "dangerous" may be someone else's acceptable risk. In fact, it is.

If the participant does not have a check, why can he not look for the deposit on a bank statement? Why can't he call his bank? I understand perfectly the point.

Since I was in agreement on the need to keep records, I asked for comments on the need to respond to the participant. I have seen no legal citation regarding a need to respond to former participants (or non-participants or beneficiaries or anyone else).

You said that the date of distribution is different from the date of receipt. I meant to say earlier that if there is no legal citation to respond to a former participant, then there is no reason to address your comment.

Thank you for letting me clarify.