401(k) Electronic Records

In April 2002, the Department of Labor (DOL) issued a final rule that allows records to be maintained electronically, provided the electronic records are as secure, legible and usable as paper records. The original paper records may be destroyed as long as the electronic records comply with the DOL regulations.

The regulation generally requires electronic records to be:

• Maintained in a reasonable order that enables ready examination;
• Kept in a safe, secure, and accessible place;
• Able to be readily converted into legible paper copies; and
• Able to produce a high degree of legibility when displayed on an electronic monitor.

In addition, the electronic recordkeeping system must:

• Provide proper labeling and identification of records;
• Maintain adequate quality assurance programs;
• Perform regular back-ups with offsite storage; and
• Provide reasonable controls to ensure integrity, accuracy, authenticity, and reliability of records.

Please note that contracting the electronic recordkeeping to a third party does not reduce or transfer the plan administrator’s obligations under the recordkeeping requirement.