NEWSLETTERS

Retaining Retirement Plan Documents

Plan sponsors have a responsibility to retain all necessary plan documents to substantiate that their Plan has always timely complied with the applicable laws and that the plan has been operated correctly each year.

ARS recommends that all plan documents and amendments be stored in a safe place for the life of the plan and that an IRS letter of determination (LOD) be obtained at least every ten years, or every other plan restatement.  An IRS letter of determination is obtained by submitting all plan documents and amendments to the IRS.  The IRS reviews these documents and replies in writing that they have made a favorable determination based on the information supplied.  If your plan is selected for audit by the IRS or DOL, most agencies will not ask for documents and amendments prior to the date of the last IRS LOD.

ARS recommends that all plan administrative reports and Form 5500's be retained for the life of the plan.  Plan sponsors should be using a third party administrator (TPA) that annually calculates contributions, reviews eligibility, performs all necessary tests, reconciles plan assets and prepares the Form 5500 using company census data and the plan’s investment statements.  The TPA firm should be timely providing the Plan Sponsor copies of the administrative reports and Form 5500 for their records.  Absence of these services and reports leaves a Plan Sponsor in a precarious position.  These services ensure the plan is compliant and the reports are the paper proof of it, which the DOL or IRS will require if the plan were audited.  These records can be purged down to a reasonable level by only saving an annual report which provides annual participant data.

ARS also recommends that all enrollment and beneficiary forms be retained in employees’ personnel files.  Plan sponsors should insist that employees electing not to make 401(k) contributions sign an enrollment form stating the zero election.  When employees stop or change their 401(k) percentage election, a copy of this request in writing that is signed and dated should also be retained in the employee’s personnel file. 

If you have questions about Retaining Retirement Plan Documents, please contact Administrative Retirement Services, Inc.

© Administrative Retirement Services, Inc. 2010
Published by Administrative Retirement Services, Inc., Copyright 2010 by Administrative Retirement Services, Inc. Reproduction in whole or in part is prohibited except by written permission. All rights are reserved. Information has been obtained by Administrative Retirement Services, Inc. from sources believed to be reliable. However, because of the possibility of human or mechanical error by our sources, Administrative Retirement Services, Inc. or others, Administrative Retirement Services, Inc. does not guarantee the accuracy, adequacy, or completeness of any information and is not responsible for any errors or omissions or the result obtained from the use of such information. Readers should seek specific advice before acting with regard to the subjects mentioned here.

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