L A W O F F IC E S
HOWE & HUTTON, LTD.
S T . L O U IS O F F IC E :
2 0 N O R T H W AC KE R D R IV E
W A S H IN G T O N , D C O F F IC E :
1421 BUCKHURST COURT
C H IC A G O , ILLINOIS 60606-9833
1901 PENNSYLVANIA AVENUE, N.W.
BALLWIN, MISSOURI
TELEPHONE
63021
(636) 256-3351
FAX (636) 256-3727
TELEPHONE (312) 263–3001
FAX (312) 372–6685
SUITE
1007
WASHINGTON, DC
TELEPHONE
__________
20006
(202) 466-7252
FAX (202) 466-5829
hh@howehutton.com
Document Retention Policy and Guidelines
Document retention is a critical but often overlooked assignment for associations and their member
companies. The recent Enron bankruptcy and the controversy over that company’s and its auditor’s
destruction of documents has demonstrated the need for a carefully planned, uniform record
retention and destruction practice.
The proliferation of forms and records over the last decade has left many associations and
businesses with file boxes and drawers of paper, back-up tapes, and electronic messages and other
media. The retention of documents not otherwise necessary to conduct business is both expensive
and inefficient. It could leave the association or member company open to potential legal
challenges on grounds based on outdated and irrelevant material. To minimize these costs and risks,
your organization should review and update its record (also called document) retention program for
the systematic retention and destruction of documents based on statutory or regulatory recordkeeping requirements and practical business needs.
A document retention and destruction policy should ensure that documents are retained only so long
as they are (1) necessary to the conduct of the organization's business; (2) required to be kept by
statute or government regulation; or (3) relevant to pending or foreseeable investigations or
litigation. Currently relevant documents should be filed systematically and accessibly. Documents
that must be maintained permanently can be catalogued and, if possible, reduced to some secure
form of electronic record for storage and easy access when needed.
To achieve these objectives, procedures should be established so that documents are filed in the
appropriate place, the number of copies is catalogued, and documents are retrieved and destroyed on
pre-established "pull" dates. One individual should have overall responsibility for initial
implementation and yearly review of compliance with the program. The program itself should be
reviewed every few years to ensure governmental requirements are being met, business needs are
satisfied, and changes in hardware and software do not prevent access to stored electronic records.
Retention periods are based primarily on current federal record-keeping requirements and state
statutes of limitation (these may vary from state to state). Meeting Professionals International, for
example, is incorporated in the State of Illinois which has adopted the Uniform Preservation of
Private
Copyright Howe & Hutton, Ltd. 2004. Copying permissible with attribution to Copyright Owners
726836189
Business Records Act (“UPPBRA”). The Act defines records as “books of account, vouchers,
documents, cancelled checks, payrolls, correspondence, records of sales, personnel, equipment and
production, reports relating to any or all of such records, and other business papers.” The Act
allows for (but does not require) destruction of these documents three (3) years from the date they
are produced. Associations and member companies are also subject to criminal penalties under
provisions of the Sarbanes-Oxley Act of 2002 passed in connection with the securities fraud
scandals of recent years, and which prohibits corruptly tampering, altering, destroying or concealing
records in an effort to prevent their availability for use in an “official proceeding.”
The following schedule highlights suggested retention periods for some of the major categories of
documents for the Meeting Professionals International and its members. MPI members are urged to
consider their own document retention and orderly destruction policies. In addition to the illustrated
categories, the document retention policy should cover accounting, insurance, personnel, real estate,
and tax records. While the policy behind retention of certain records is prescribed by statute, at other
times the policy comes from practical business experience and judgments. You may also choose to
adopt more conservative retention periods for certain types of documents. The terms below are
considered minimums, after which destruction is permitted, though not required. Each organization
should develop its own detailed program, of course, depending on its specific needs.
A good record retention policy should minimize both the legal risks flowing from hastily drafted or
misleading documents and the adverse inferences that may arise from the selective destruction of
documents in the absence of such a policy. Moreover, the expense of storing obsolete documents as
well as the cost of retrieving documents in response to business requests, government investigations
or litigation should be reduced. The following schedule sets forth guidance for the Meeting
Professionals International. Members may adapt the schedule for their own needs.
Type of Record
Retention Period (years)
Law/Policy (source)
ACCOUNTING
Auditors' reports
P
CCH recommendation
Budgets
7
CCH recommendation
Cancelled checks, generally
3
UPPBRA
Depreciation records
P
CCH recommendation
Officer, director and employee
expense reports
3
UPPBRA
Employee payroll records (W-2, W-4)
annual earnings records, etc.)
3
FLSA, UPPBRA
Inventory lists
7
CCH recommendation
2
Invoices
7
CCH recommendation
Payroll journal
3
FLSA, UPPBRA
Petty cash vouchers
3
UPPBRA
Subsidiary ledgers (accounts receivable,
accounts payable, etc.)
7
CCH recommendation
Annual reports
P
CCH recommendation
Authorizations and appropriations
for expenditures
7
CCH recommendation
Contracts, generally
Expiration +7
CCH recommendation
Contracts, government
Expiration +7
CCH recommendation
Contracts, sales (UCC)
7
CCH recommendation
Notes (internal reports, memos, etc.)
3
UPPBRA
3
UPPBRA
Accident reports
7
CCH recommendation
Insurance policies
P
Practical experience
P
(See below 1)
1
Title VII, ADA
CORPORATE RECORDS
CORRESPONDENCE
General, routine
INSURANCE
LEGAL
Claims and litigation files
PERSONNEL
Applications
1
Company copies of all pleadings, key briefs and motions, court orders and opinions of record on dispositive
motions and hearings, any attorney-client confidential privileged communications, all original witness statements
and affidavits, exhibits, and settlement agreements/contracts need to be kept permanently. Mere drafts of various
and routine pleadings, motions, and briefs, as well as multiple copies of original business documents need not be
retained.
3
Employee earnings/payroll records
3
FLSA
Employee files
4
SSA, FLSA, ERISA,
ADEA, Equal Pay Act
Employment contracts
Expiration + 3
FLSA
Form I-9
3
Immigration Reform
& Control Act
Garnishments
7
FLSA
Medical or exposure to toxic
substances records
30
OSHA
Pension documents/profit sharing plans
6
ERISA
Government reports
5
CCH recommendation
Employee pension records,
including service, eligibility,
personal information, pensions paid
6
ERISA, ESA
Time cards/sheets
3
FLSA
Leases
Expiration + 7
CCH recommendation
Deeds
P
CCH recommendation
Mortgages
P
CCH recommendation
Income tax returns and cancelled
checks (federal, state and local)
6
IRS Code
Payroll tax returns
4
IRS Code
Property tax returns
P
CCH recommendation
Sales and use tax returns
4
IL Use & Occupation
Tax Act
REAL ESTATE
TAXES
4