What Every Plan Sponsor Should Know Protecting Your Retirement Plan and Your Business Starts with Good Recordkeeping

At Pivot CPAs, we work with many employers and plan sponsors across Northeast Florida and beyond to help them meet their fiduciary responsibilities under the Employment Retirement Income Security Act (ERISA). One area that often confuses and can carry real financial risk is record retention.

If your company sponsors an employee retirement plan, you’re required to keep accurate and accessible records. That’s nothing new, but what many sponsors don’t realize is just how long those records must be retained, and how many ways they can be lost.

In this article, we’ll break down the essentials of ERISA record retention, what can go wrong, and how to protect yourself and your participants from future headaches.

Why ERISA Record Retention Matters

Imagine this: A former employee or their family reaches out decades later, claiming they’re owed retirement benefits. You’re confident the payout was made, but there’s a problem: you can’t find the records to prove it.

In this case, the burden of proof is on you, the plan sponsor. If you can’t show that the benefit was already paid, you may have to pay it again.

That’s just one example of why solid record retention policies are crucial for plan sponsors. Retirement plans, by nature, are long-term, so the supporting documentation has to stand the test of time, too.

What Are the Rules Around ERISA Recordkeeping?

Several regulatory agencies have rules in place for how long you must retain benefit plan records. Here’s what you need to know:

• ERISA Section 107 requires you to retain plan records (including supporting documentation) for six (6) years from the date your plan files its Form 5500.

• The IRS generally requires ERISA plan records to be retained for three (3) years from the Form 5500 filing date.

• But most importantly, ERISA Section 209 says you must keep plan records until all benefits have been paid out and the window for plan audits has closed. This is the critical and often overlooked rule that places long-term responsibility squarely on the sponsor.

Bottom line? When it comes to proving benefits were paid, you’re responsible, no matter how many years have passed.

Understanding Form 8955-SSA and Why It Matters

Form 8955-SSA is used to notify the Social Security Administration when a participant leaves employment with a vested retirement benefit they haven’t claimed. This happens more often than you’d think.

When that former employee hits retirement age, the SSA sends them a notice. Then they come back to you, maybe 10, 20, or 30 years later, looking to claim the benefit. If your records don’t clearly show that the benefit was already distributed, you could end up paying it again.

With the baby boomer generation entering retirement in large numbers, plan sponsors can expect more of these types of claims.

Who’s Responsible for Keeping These Records?

The short answer? You are. Even if you use a third-party administrator (TPA) or payroll provider, the plan sponsor is ultimately responsible for retaining all relevant plan documents and distribution records.

Here’s a general list of what you should keep on file:

Key Documents to Retain:

• Signed plan documents, amendments, IRS determination letters

• Summary plan descriptions and modifications

• Trust documents and board/committee meeting minutes

• Participant census data (eligibility, vesting, and benefit calculations)

• Loan and distribution records

• Service agreements with TPAs and other vendors

Common Scenarios Where Records Get Lost

Even well-meaning companies can lose critical plan documents. Here are a few common pitfalls:

1. Standard Record Retention Policies

Many companies follow general retention schedules, like keeping documents for 7 years. But ERISA records often need to be kept much longer, even indefinitely in some cases.

2. Mergers, Acquisitions, or Business Sales

Plan documentation can get overlooked in the due diligence process or lost entirely post-closing. But the new sponsor still holds the responsibility.

3. Switching TPAs

If you change vendors or your previous provider goes out of business, there’s no guarantee they’ll keep your plan documents unless your contract specifies it. Always confirm how records will be handled during transitions.

4. System Conversions & Data Migrations

Upgrading or migrating to a new HR or payroll system? Those transitions often lead to accidental data loss, especially if historical files aren’t properly backed up or transferred.

Regardless of how or why records go missing, you’re still responsible for proving benefits were properly paid.

Best Practices for Protecting Your Plan (and Your Business)

Implementing a few smart practices can go a long way in protecting your retirement plan and reducing the risk of future claims.

ERISA Record Retention Checklist:

✔️ Keep executed versions of all plan documents signed, dated, and complete

✔️ Use a written record retention policy that includes benefit plans and ERISA-specific guidance

✔️ Review your TPA contracts for clauses covering data retention and access

✔️ Ensure secure digital backups are in place and accessible to fiduciaries

✔️ Retain historical records when switching vendors or payroll providers

✔️ Update Form 8955-SSA when participants receive distributions

✔️ Use technology that keeps records secure, backed up, and retrievable

Recordkeeping Isn’t a One-Time Task

Record retention under ERISA is an ongoing obligation, not something to check off once and forget. Now is a great time to review your current practices and make sure you’re fully covered, especially if your plan has gone through transitions or personnel changes in recent years.

Let Pivot CPAs Help You Stay Compliant

Pivot CPAs has deep experience in employee benefit plan audits and compliance consulting for companies throughout Jacksonville, St. Augustine, and the greater Northeast Florida region. We help plan sponsors stay compliant, reduce risk, and avoid costly oversights, so you can focus on running your business.

If you’re not sure your plan’s records are in good shape, let’s talk. We can review your documentation protocols, help identify gaps, and guide you toward better practices.

Need help evaluating your ERISA record retention policies?

Let the Employee Benefit Plan team at Pivot CPAs give you clarity and peace of mind. Contact us today to schedule a review or learn more about our ERISA compliance services.