Learn why we recommend keeping your old retirement plan documents for at least 6 years–or even indefinitely.
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Typically, business owners should permanently retain all plan documents from the previous 401(k) provider. Annual filing reports from the previous provider should be retained for a minimum of 6 years. Participant records should be retained for the duration of the employee’s enrollment in the plan or for a minimum of six years after the employee’s termination or loan repayment.
When you switch to one of Ubiquity’s low-cost 401(k) plans for small businesses, we provide a seamless transition from your previous provider, including retention of all necessary plan records, to ensure no difficulties down the road.
The IRS has been known to investigate plans dating back three years if they have reason to suspect the numbers aren’t adding up right. To be on the safe side, 401(k) records should be kept for a minimum of six years after filing Form 5500, as indicated in ERISA Section 107.
There is no need to worry about what will happen to old 401(k) documents when you switch to a new provider. During the transition, the old recordkeeper is legally required to hand over all files and documents to the new recordkeeper. Depending on how organized or cooperative the old provider was, this process can take anywhere from 24 hours to three months. The new 401(k) provider will review all plan documents line by line and make sure all the necessary files have migrated over. There is generally a brief blackout period for one to 10 days where the data changeover takes place, and changes cannot be made to individual accounts.
Section 107 of ERISA requires you to “maintain records to provide sufficient detail to verify, explain, clarify, and check for accuracy and completeness” in your benefits plan. Similarly, Section 209 states employers must maintain employee records “sufficient to determine the benefits due, or which may become due, to such employees.”
Holding onto these important documents are necessary:
To stay organized, a 401(k) plan provider or sponsor should keep three separate files:
Archive for historical reference:
The file should include:
All participant-level benefit determination paperwork should be maintained, including:
For each plan year, a file should contain:
Preserving necessary documents is easy when you work with a prudent 401(k) provider like Ubiquity. Contact us for details on switching to receive expert 401(k) administration geared toward SMBs for one low, transparent monthly fee. We never charge AUM fee percentages or per-person charges!