As a plan sponsor, you carry the responsibility of ensuring the success of your organization’s retirement planning and its compliance. One crucial aspect of this responsibility is proper recordkeeping. Managing and maintaining accurate and organized records is not only a legal requirement but also crucial for effective retirement planning. How so? Join us as we discuss why well-executed recordkeeping is so crucial and how to implement it in your own operations.
Why is Recordkeeping Important for Plan Sponsors?
Recordkeeping is the important act of managing all necessary documents for your retirement plan. For plan sponsors, recordkeeping is a vital fiduciary duty. It ensures transparency, accountability, and the ability to demonstrate compliance to both regulatory agencies and plan participants. Here are some key reasons why good recordkeeping is essential:
Fiduciary Responsibility
As a plan sponsor, you have a fiduciary duty to act in the best interests of your plan participants. Maintaining thorough records helps you monitor plan activities, document decisions, and ensure the plan operates in-line with its objectives and participant needs.
Compliance and Audit Preparedness
Accurate records help you meet the ever-increasing regulatory requirements and provide a solid foundation for audit trail purposes. It allows you to demonstrate adherence to applicable laws and regulations, protecting your plan from penalties and legal issues.
Plan Administration Efficiency
Efficient recordkeeping facilitates smooth plan administration. It enables quick retrieval of necessary information, simplifies communication with plan participants, and ensures accurate reporting and disclosure to relevant stakeholders.
Well-executed recordkeeping ensures plan administration is more streamlined.
Recordkeeping 101: What to Keep and for How Long?
To fulfill your recordkeeping responsibilities, it’s important to know what documents to retain and for how long. Here are some common documents and their typical retention periods:
Plan Documents
This includes the written plan document, any amendments, and plan agreements. These documents should be retained permanently as they form the legal foundation of your retirement plan.
Participant Information
Records related to participant enrollment, contribution elections, investment allocations, and beneficiary designations should be kept for at least six years according to the American Society of Pension Professionals & Actuaries (ASPPA).
Communications
Any written communications, such as participant notices, disclosures, and summary plan descriptions, should be maintained for at least six years from the date they were distributed.
Financial Records
This includes statements, reports, and accountings related to plan investments, contributions, distributions, and expenses. These records should typically be retained for at least six years.
Simplify Recordkeeping with RPCSI
Managing recordkeeping responsibilities can be complex and time-consuming. This is where the professionals at RPCSI come in. As a trusted retirement plan administration firm with over 20 years of experience in the industry, we offer a range of administration and recordkeeping services to ease the burden of managing your retirement plan, including plan year-end valuations, compliance testing, and government reporting. Reach out to request a quote and—with RPCSI as your partner—confidently manage your recordkeeping obligations and navigate the complex world of retirement planning.
