Yes, there are legal requirements for retention. In general, ERISA Sec. 107 requires employer-sponsored group plans to maintain all records relating to ERISA reporting and disclosure requirements for at least six years. This statutory requirement includes all records that would be needed to verify, explain and check for accuracy in compliance with the reporting and disclosure rules. Among the types of records included are vouchers, worksheets, receipts and applicable company resolutions.

The six-year period begins on the date reports (such as 5500 forms) are required to be filed under ERISA (or if there is a small plan exemption, the date on which reports otherwise would have been required to be filed). Thus, ERISA-related records must be retained even for welfare benefit plans with fewer than 100 participants.

This six-year period coincides with the period under Internal Revenue Code Sec. 6501 for which the IRS can assess tax penalties for failure to file or for filing incomplete or misleading information.

There are no specific requirements for disposal of employee benefits information; however, standard best practices for document disposal would clearly apply to any information with individual identifiers, and any personally identifiable health information would be covered under HIPAA’s privacy rules. State laws may also come into play.

Source: Spencer’s Benefits Reports, Questions and Answers, June 2009.