How long to keep documents relating to 401(k)?

We run a small TPA Recordkeeping firm. While we've moved most things to electronic forms, we still have filing cabinets full of various old documents. The biggest one is distribution request forms mailed to us from participants, as well as inactive signed plan documents back when we handled those on paper. How long do documents like these need to be retained, or is it indefinite?

Prior discussions on the topic. 

It really depends on the typic of document.  However, we keep documents forever.  It doesn't come up very often but now and then being able to determine how things should have worked back in the day is needed.  And as you can read proof a person's benefits have been computed correctly and/or paid is pretty much forever.  

Is record retention addressed in your service agreement?  Also, does this become not only a record retention issue but also a security issue?

Would the answer change in regards to clients who went to another TPA firm?

How about old clients who terminated their Plan and may or may not still be in business?

1 hour ago, ESOP Guy said:

Prior discussions on the topic. 

 

It really depends on the typic of document.  However, we keep documents forever.  It doesn't come up very often but now and then being able to determine how things should have worked back in the day is needed.  And as you can read proof a person's benefits have been computed correctly and/or paid is pretty much forever.  

Thank you, will do some reading on this. 

37 minutes ago, Gilmore said:

Is record retention addressed in your service agreement?  Also, does this become not only a record retention issue but also a security issue?

Unfortunately not. The firm I'm with is a relatively small firm that went from a branch of a messy, union-owned insurance company to the management of a sole practitioner who took over when the insurance company went under in 2013, and only in the last few years has it grown to the point we're out now where we have a small team of staff.

Much of my role at the company revolves around tightening up policies and addressing edge-case things like this to prepare us to grow & follow best practices, as it's much easier to establish that when small than it is to clean up a large company with piles of issues. I'll speak to my team about addressing document retention in our service agreement. 

On the security issue side of things, it's not the largest concern as of yet; the records sit in locked filing cabinets inside a locked Records & Server room, which only the owner and myself have a key to. Regardless of retention length we're thinking of digitizing everything we can partially for security purposes anyway. 

For a third-party administrator, some hard questions in designing a records-retention (and records-destruction) plan are about considering public-law record-retention requirements imposed on the plan’s administrator or the plan’s trustee, and deciding the extent to which the TPA wants to serve as a backup to help the plan’s administrator or trustee meet one’s duties.

(Some TPAs perceive that one’s service recipients often are inept in meeting a fiduciary’s records-retention duties, and will be thankful when the TPA has preserved a record the plan’s administrator or trustee ought to have kept.)

Another factor might be keeping a record until it no longer could be needed to disprove a not yet time-barred breach-of-contract or tort claim against the TPA. Or, discarding a record so its discovery could not be used to help prove a claim against the TPA.

Tightening-up might include rewriting a TPA’s service agreement to narrow obligations, and widen a responsible plan fiduciary’s permissions granted to the TPA.

This is not advice to anyone.