ERISA Recordkeeping

ERISA section 107 requires plan administrators to retain records sufficient to document the information that is required to complete the Form 5500.  If an employer is exempt from filing the Form 5500, then they still must maintain what would have been required, if not for the exemption.

Plan Records

The amount of information contained on the Form 5500 (and therefore the amount of supporting records) will vary by size and type of plan.  For example, a large funded plan will complete more accompanying Schedules than a small, unfunded plan, and must maintain the documentation used to complete each Schedule.

Please note that the HIPAA Privacy rule requires Business Associates to destroy certain information when it is no longer being used.  Plans that work with Business Associates under HIPAA Privacy should insure that appropriate documents are either not destroyed until the end of the 6 year period, or are returned to the plan.

List of Plan Records

The actual records maintained may vary significantly by plan and use of third parties.  The following are examples of the types of documents that may be maintained.

• Administration forms, such as claims, beneficiary, certificates of creditable coverage
• All plan documents, amendments and resolutions
• Bonding information and fiduciary liability insurance
• Claim appeals/denials and supporting documentation
• COBRA notices and forms
• Collective bargaining agreements (if applicable)
• Discrimination tests
• Financial statements (if required)
• Form 5500, associated schedules and all documentation and worksheets that support these documents
• HIPAA documentation and associated materials
• Insurance policies or contracts
• Interpretations of plan benefits and language
• Open enrollment materials
• Qualified Medical Child Support order documentation
• Reporting & disclosure checklist and procedures
• Requests for information by plan participants or others
• SPDs, including booklets and certificates and SMMs (if applicable)
• Summary Annual Reports (if required)
• Third party service contracts and all related documentation
• Trust documentation (if applicable)

Electronic Records

In April 2002, the DOL issued a final regulation that allow 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.

Requirements of this regulation include:

Electronic Records

• 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
• Produce high degree of legibility when displayed on an electronic monitor

Electronic Recordkeeping System

• Provide proper labeling and identification of records
• Maintain adequate quality assurance programs
• Perform regular back-ups with offsite storage
• 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.

Noncompliance

Civil
Participants and beneficiaries may bring suit to enforce any provision of ERISA, including the recordkeeping requirements.  The person or entity responsible for the recordkeeping failure, may be responsible for the resulting costs to the plan.

The DOL or any plan participant may sue for breach of fiduciary duty in the event of a recordkeeping failure, and the fiduciary responsible for the failure could be held personally liable.

Criminal
Any person who willfully violates (i.e. the person acted knowingly and voluntarily) any provision of Part I of Title I of ERISA can be subject to a fine of up to $100,000, imprisonment of up to 10 years, or both.

Any person who knowingly makes a false statement or representation of fact, or who knowingly conceals, covers up or fails to disclose any fact in any document covered under the recordkeeping rules may be subject to a fine, imprisonment of up to 5 years, or both.

In addition, even if a third party recordkeeping service is used to maintain these records, the Plan Administrator or certifying entity retain ultimate responsibility for ensuring they are maintained according to ERISA requirements.