In the addition to the reporting and disclosure obligations that fiduciaries have, erisa also requires that plan sponsors retain the records that support the information included in the 5500 filing and other. The plan document should include the trust agreement if applicable and insurance contracts. Importance of maintaining an erisacompliant document. The importance of retaining and protecting employee benefit plan records 1. May 05, 2014 under this standard, individuals requesting planrelated documents that they are entitled to under erisa must provide clear notice to the plan administrator of the information they desire. A reliably followed record retention policy allows you to respond to employee documentation requests or changes, deal with audits, and keep the plan compliant.
Aug 04, 2007 so in a brief q and a format, here is some basic information about document retention for erisa plans. The employee retirement income security act of 1974 requires that you retain important plan documentation. The summary plan document must state the name of the plan, the name, address, and phone number. In developing such a policy, it is important for employers to consider the rules applicable to documents related to plans subject to. Record retention guidelines for employee benefit plan sponsors. Sep 09, 2017 the plans document retention methods should allow for migration to more current storage systems to assure the longterm preservation of the data integrity and security. Dol finalizes rules for electronic delivery of documents and information under erisa by henry a. Erisa section 102 requires an employee benefit plan furnish participants with a summary plan description which is subject to regulations in 29 cfr 2520. Irrespective of the various document retention requirements under federal and individual state laws, two basic record retention provisions under the employee retirement income security act of 1974 erisa exist. Learn more about the importance of erisa plan documents. Many employers maintain policies for compliance with the various laws governing document retention. Summary plan description wrap erisa wrap document erisa. Document retention for erisa plan sponsors the benefit blog. A plan advisory explains employee retirement income security act erisa rules for record retention and offers best practices for that and.
Jun 29, 2016 the plan document is a written document that describes the participants rights, benefits, and obligations within the plan, as well as the plans terms and conditions for administering the plan. These records may be retained using requirements are met. Generally, from an erisa fiduciary perspective, it is important to have an erisacompliant document retention policy. The internal revenue code and income tax regulations as well as the employee retirement income security act of 1974, as amended erisa require plan sponsors to keep records of these transactions because they may become material in administering pension law. The employee retirement income security act erisa provides for the retention of plan level records for a period of six years and retention of participantlevel records for an. Further, to have your employees health plan premiums be deducted on a pretax basis, you must have a section 125 plan or a cafeteria plan in place. Nov 17, 20 erisa has two provisions that concern record retention. Erisa requirements for employee benefit plan administration. Types of retirement plans and plan document retention. The key question here is whether the plan administrator knew, or should have known, which documents were being requested. Retirement plans are designed to be longterm programs that benefit employees. The employee retirement income security act of 1974 erisa is a federal law that sets minimum standards for employee benefit plans maintained by privatesector employers.
Document coverage eligibility requirements plan document, spd determine tracking method in. Erisa record retention requirements in plain english forusall. Erisa has two provisions that concern record retention. According to erisa 107, anyone who files or certifies certain information e. Sep 02, 2009 so in a brief q and a format, here is some basic information about document retention for erisa plans. However, document retention related to benefit plans goes far. Erisa record retention requirements in plain english. The supreme court has added the requirement that a severance pay plan will not be subject to erisa unless it is necessary to establish an administrative scheme to provide the benefits.
Learn about the erisa record retention requirements in this short. Erisa section 701, as enacted under hipaa, establishes records retention requirement for erisa welfare. If you are the plan sponsor of a retirement plan covered under the employee. An insurance companys master contract, certificate of coverage, or. While plan sponsors can alleviate some of this document retention headache by hiring a thirdparty administrator tpa, hiring a tpa does not relieve sponsors of their. Alternatively, failing to preserve records may subject a plan sponsor to an erisa violation for failing to provide document disclosure upon request by a participant. Proper data retention will assist the plan sponsor with meeting the. If you are a plan sponsor, you may have asked the question which documents are required to be retained, and for how long. It is required for each welfare benefit plan an employer maintains which is subject to erisa, and it must be in writing. If a combined document is used, the document must comply with both erisas plan document requirements and applicable spd format and content rules. Record retention guidelines for employee benefit plan.
A written plan document or the absence of a document does not determine whether a plan is covered by erisa. Retirement plans are designed to be longterm programs for participants to. As a plan sponsor you are required to keep certain records. The plan document describes the plan s terms and conditions related to the operation and administration of the plan. This advisory describes erisa and dol record retention requirements. Do i need a plan document for each of my welfare benefits that depends on how you define plan.
Many employers refer to their various welfare plan coverages medical, dental, life etc. For plan sponsors of esops and any stillexisting money purchase or target benefit plans, these policies would also apply. Erisa solutions provides a webbased summary plan description spd wrap service that allows clients and their broker to easily create, store and update summary plan description documents, as needed. Mar 05, 2015 employee benefit plan record retention every so often, a client or potential client contacts us inquiring how long they need to retain their qualified retirement plan records. In determining what type of benefits are included in the erisa plan, you must refer to the plan document instead of the spd. While plan sponsors can alleviate some of this document retention headache by hiring a thirdparty administrator tpa, hiring a tpa does not relieve sponsors of their fiduciary duties. Mar, 2015 erisa requires group health plans to have a written plan document in place, and to provide a summary plan description spd to plan participants upon enrollment in the plan, among other times. The plan s document retention methods should allow for migration to more current storage systems to assure the longterm preservation of the data integrity and security.
Faq re erisas records retention for employee benefit plans. Erisa section 209 states that an employer should maintain records with. The federal law erisa employee retirement income security act imposes administrative obligations on employers with employee benefit plans. The employee retirement income security act erisa requires plan administrators the people who run plans to give plan participants in writing the most important facts they need to know about their retirement plans including plan rules, financial information, and documents on the operation and management of the plan. This plan is meant to be used with the sample plan document. Erisa sectio n 107 requires retention of records for 6 years from the date of filing, including all required notices and disclosures, and various governmental filings like the annual report form 5500. Theres a lot of confusion about 401k plan documents retention. However, these are not your legal erisa plan documents. In addition, all plan documents and plan amendments should be retained. Erisa section 107 contains an explicit 6year record retention requirement concerning records relating to certain reports. The employee retirement income security act erisa requires plan administrators the people who run plans to give plan participants in writing the most important facts they need to know about their retirement and health benefit plans including plan rules, financial information, and documents on the operation and management of the plan. Jun 14, 2018 section 107 of erisa mandates a sixyear document retention period for purposes of its reporting and disclosure requirements e. Erisa plan the employee retirement income security act erisa of 1974 establishes minimum standards for retirement, health, and other welfare benefit plans, including life insurance, disability insurance, and apprenticeship plans.
The administrator provided you with a spd but not a plan document. This partnership resulted in a combination of knowledge and experience that has produced the premier plan document and document generation system. If a plan is changed, participants must be informed, either through a revised summary plan description, or in a separate document, called a summary of. All joking aside, this is actually pretty serious business.
Erisa section 209 requires plan sponsors to maintain records sufficient to. A severance pay practice may be covered by erisa even if it is not set out in writing or in a formal plan document see er3. Klr record retention guidelines for employee benefit plan. It provides information on when an employee can begin to participate in the plan and how to file a claim for benefits. Posted on june 14, 2018 by haynes and boone benefits group in practical benefits lawyer. Dol finalizes rules for electronic delivery of documents and. The dol, irs, pension benefit guaranty corporation pbgc and employee retirement income security act of 1974 erisa have established record retention policies specific to employee benefit plans. It permits you to create stateoftheart erisa compliant welfare benefit plan documents and summary plan descriptions spds based on industry best practices on demand and at an affordable cost.
The summary plan description is an important document that tells participants what the plan provides and how it operates. Adopting a group health plan will allow the employees to comply with the aca individual mandate without purchasing commercial. Creating a policy plan sponsors should consider the erisa requirements in their overall document retention policy. In addition, under the employee retirement income security act of 1974, as amended, erisa employers are required to keep records sufficient to determine benefits due or which may become due. Employers offering an employee welfare benefit plan, such as health insurance or a retirement plan, are subject to the provisions of the the employee retirement income security act erisa. If you do not have an erisa plan document and summary plan description, often called your wrap documents, your plan is out of compliance. These records may be retained using electronic media when certain requirements are met. If you refer to your welfare coverages as separate plans with separate plan numbers, separate erisa plan documents, spds and forms 5500 would be required. With the spd wrap, it creates one document and overall spd required for all health and welfare benefits such as medical, dental, life, disability. Erisa plans and requirements benefits subject to erisa and plan document requirements disclosure requirements written plan document, spd, smm, and sar reporting requirements form 5500 wrapping erisa benefits aca information nondiscrimination rules. The short answer is it depends and for a long time. Although erisa does not specify a penalty for failure to maintain records, the same civil and criminal penalties apply as with knowingly violating any other erisa provision. Aug 15, 2014 erisa has two retention provisions pertaining to what documents to keep and for how long.
Maintaining your retirement plan records internal revenue service. To clarify, you would like one plan under erisa that includes the selffunded medical, along with the fully insured benefit programs. John and charles had been drafting plan documents for over two decades and prior to that had spent years on the regulatory side with the internal revenue service and department of labor. Failing to do so can get you into really hot water in the event of an audit. If a defined benefit plan is sponsored, it is important to maintain, for example, the employees compensation and service history. Aicpa reminds plan sponsors of record retention rules. Nov 01, 2016 cafeteria plans must have plan documents as well as documentation evidencing the adoption of the plan, and plans subject to erisa need a plan document outlining the plans terms for a number of items, including eligibility, benefits, exclusions, a named fiduciary and plan administrator, claims and appeals procedures, funding information, and. The written plan document is the instrument by which the plan administrator must operate the plan. There must be a plan, fund, or 1 program the plan must be part of the employment relationship.
So, in the simple case, if a client maintains a tax qualified defined benefit plan with a. The answer to the document retention question under erisa is not clear. Furthermore, a failure to retain documents may subject a plan sponsor to fiduciary breach. Form 5500, trust reports, audited financial statements, all required notices, for a period of at. Erisa provides for the retention of plan level records for a period of six years and retention of participantlevel records for an indefinite period of time.
First, erisa 107 requires anyone who files or certifies certain information i. Employee benefit plan record retention pinnacle plan design. Hernandez the employee retirement income security act of 1974, as amended erisa, requires that employers provide certain information and documents to benefit plan participants and beneficiaries. This erisa health and welfare plan compliance webinar will cover. Some courts have found, however, that it is unacceptable to have one document serve as a. Erisa section 209 requires maintenance of records sufficient to determine the benefits due to employees. Erisas extensive rules address the federal income tax effects of transactions associated with employee benefit plans, with mandates that qualified plans must. Frequently asked questions and answers about erisa basics for. Erisa, sections 107 and 209 speak to record retention of employee plans. Finally, revenue procedure 9825 provides the basic requirements for recordkeeping when a taxpayer maintains records in an automatic data processing system.
Erisa pros website wrap tight is a fully integrated compliance and document management system. Plan sponsors should consider the erisa requirements in their overall document retention policy. The irs indicated that record retention applies to sep plans, simple iras, 401k plans, profitsharing plans and defined benefit plans. Highlights of record retention requirements applicable to. Reporting and plan documents under erisa and cafeteria plan rules. Proper data retention will assist the plan sponsor with meeting the fiduciary duties of erisa including the prudent man rule. This sample group health plan is intended for adoption by selfemployed individuals and organizations with only one person or family both owning the organization and serving as the sole employees. These are all essential aspects of managing employee retirement plans and benefit entitlements. Retirement plans are designed to be longterm programs for participants to accumulate and receive benefits at retirement. Jun 27, 2016 erisa provides for the retention of plan level records for a period of six years and retention of participantlevel records for an indefinite period of time. Ebpaqc plan advisory the importance of retaining and. Form 5500, trust reports, audited financial statements, all required notices, for a period of at least six years after the document is filed in accordance with section 107.