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From the MER Conference 2012 Speakers: Christine Burns and Carol Stainbrook Despite their best efforts, many companies haven't been able to devise retention schedules that can be readily applied to both their paper records and electronically stored information (ESI). Retention categories that are too broadly written can lead to excessive retention of needless information, which in turn results in higher recordkeeping and discovery costs. Conversely, retention schedules that are too detailed aren't easy to maintain or use, especially with the proliferation of ESI. Having the right blend of specificity and universality isn't impossible - it just takes understanding some key considerations. This session addresses: - Integrating conflicting statutory and regulatory requirements from different jurisdictions in ways that address different organizations' unique cultures and needs, - Determining when and how to collapse information types into fewer retention categories, - Learning when to limit the number of different retention time periods, - Recognizing different options to handle "event-based" retention periods, and - Balancing IT's seemingly contradictory needs: fewer retention periods that can be applied to broader sets of information and sufficiently detailed retention specifications that can be applied to specific tables of data within large, integrated business systems.
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Cohasset Associates, Inc.
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4.12012 Managing Electronic Records Conference
Retention & ESIRetention & ESIPaths to SuccessPaths to Success
Part One
May 7, 2012 1
Christine M. Burns & Carol Stainbrook
ESI Friendly Retention Schedules
Use Functional, not Detailed Retention SchedulesSimplify Conflicting Legal RequirementsC lid R i P i d
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Consolidate Retention Periods Eliminate “Events”Balance Detail Against Simplicity for IT
May 7, 2012 2
Functional Retention Functional Retention SchedulesSchedules
© 2012
Streamline Retention Schedules
May 7, 2012 3
Cohasset Associates, Inc.
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4.22012 Managing Electronic Records Conference
Detailed Schedules IncludeRetention Period Per Document Type
Financial StatementsMonthly
Financial StatementsQuarterly
Financial StatementsAnnual
© 2012 May 7, 2012 4
Retain 12M Retain 2Y Retain 7Y
Functional Schedules Typically Apply ToAll Records of a Business Process
Financial Statements
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StatementsData & Directories
Retain “X” Years or “Max. of X Years”
Know Your LawsKnow Your Laws
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Simplify Conflicting Legal Requirements
May 7, 2012 6
Cohasset Associates, Inc.
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4.32012 Managing Electronic Records Conference
General Accounting Records:Some Legal Retention Requirements
Permanent (General Ledger)
Wisconsin (Domestic
50 Years - General and Subsidiary Ledgers
Tax + 3 7 Years
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(Domestic Insurers)
Georgia (Banks)
Canada
U.S. Utility Companies (Per SEC)
Tax + 3-7 YearsIRS – 3-6 Years; Worthless Securities Loss Claims – 7 Years
Most State Tax Authorities – 3-6 Years
May 7, 2012 7
General Accounting Records
General Accounting Records:Accounts receivables and payablesTransactions account entry supportReconciliation of accounts ledgers and sub
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Reconciliation of accounts, ledgers and sub-ledgersFinal accounting transaction reports and data
May 7, 2012 8
General Accounting Records:Operational Retention Considerations
Typically Current with Tax Audits?
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Must Retain General Ledgers Longer than other Accounting Records?
Impact of Escheat Filings?
May 7, 2012 9
Cohasset Associates, Inc.
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4.42012 Managing Electronic Records Conference
Payroll Records:Some Legal Retention Requirements
Employment + 2 or 5 Years
British Columbia
Current Year + 8 Years
Minnesota6 Years or Less
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Columbia, Saskatchewan
MinnesotaOther States
3 Years
United States (Federal)
May 7, 2012 10
Payroll RecordsRetention Based on Creation Date
Payroll Processing RecordsSalary, merit and status changesVacation and overtime payment authorizations
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authorizationsEmployee reimbursements for tuition and/or relocation servicesAdjustments and manual compensation check supportPayroll registers and period-ending reports
May 7, 2012 11
Payroll RecordsRetention Based on an “Event”
Payroll Deductions & AuthorizationsTax status and withholding forms, e.g., W-4sDirect deposit formsDeductions authorizations
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Deductions authorizationsDefined Benefit Pension Calculation Support
May 7, 2012 12
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4.52012 Managing Electronic Records Conference
Payroll Records:Operational Retention Considerations
Calculate Pension Benefit?
Consider Personal Injury/Property Limitation of Action Periods?
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Consider Potential Liability UnderLilly Ledbetter Fair Pay Act?
Consider Limitation Periods in the Dodd-Frank Wall Street Reform &Consumer Protection Act?
Destroy Personally IdentifiableWhen Eligible?
May 7, 2012 13
General Contracts
Obligations + 30 YearsBritish Columbia & Manitoba Obligations + 15 Years
Kentucky, Ohio,Ontario, Saskatchewan, & New Brunswick
Obligations + 10 YearsIllinois Indiana Iowa Louisiana Missouri Rhode 6 Years or Less
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Illinois, Indiana, Iowa, Louisiana, Missouri, Rhode Island, West Virginia & Wyoming;Alberta, Newfoundland and Labrador & Quebec
6 Years or LessAll remaining states and provinces
Contract Records
Contract recordsRFPs and ResponsesContract Review RecordsAgreements and Exhibits
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Agreements and ExhibitsAmendmentsCertificates of Insurances
May 7, 2012 15
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4.62012 Managing Electronic Records Conference
Contract Records:Operational Retention Considerations
Difference Between “Major” and “Minor” Contracts?
Are Certificates of Insurance Filed
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With Contracts?
Is the “Active” Period Consistent?
Do NDA’s “Expire”? If not, what is a reasonable validity period?
May 7, 2012 16
Consolidate RetentionConsolidate Retention
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Limit Number of Retention Periods
May 7, 2012 17
Establish ONE Retention Period for Internal, Non-Regulated Records
X Years
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Current + X Years
No Longer than X After Last Use
May 7, 2012 18
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4.72012 Managing Electronic Records Conference
Combine Retention Periods for Longer-term Regulated Records
G l
Payroll
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Privacy
General Accounting
X Years
May 7, 2012 19
Number of Retention Periods Will Vary, Often Based on Regulations
More Regulated
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Less Regulated Functions or Jurisdictions
More Regulated
May 7, 2012 20
Lightly Regulated, U.S. Based Only
Retention PeriodActive Use + 3 YearsActive Use + 7 Years
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Active Use + 7 Years“Indefinite”
“Indefinite” ~ 6 Categories with a Required Minimum and a Not to Exceed Maximum Retention Period “Active Use” Period Varies by Record Type
May 7, 2012 21
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4.82012 Managing Electronic Records Conference
Moderately Regulated, Canadian & U.S. Locations
Retention Years Record Types7 Years General accounting records (excluding
the general ledger)10 Years Payroll records
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10 Years Payroll recordsEmployment +
10 YearsPayroll records - British Columbia, Saskatchewan
15 Years General contractsPermanent General ledger
New York Based Organization,U.S. Federal & 50 State Jurisdictions
Retention Years Record Types7 Years General accounting records and
general contracts9 Years Payroll-related records, excluding year-
d ll i t
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end payroll registers50 Years Payroll registers, compensation plan
records
May 7, 2012 23
Eliminate “Events” Eliminate “Events” Whenever PossibleWhenever Possible
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Choose How to Handle “Event-Based” Retention
May 7, 2012 24
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4.92012 Managing Electronic Records Conference
Eliminate Event-Based Retention Periods Whenever Possible
Tax Audit or Exam
Project Completion
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Project Completion
Termination
Updated
May 7, 2012 25
Consider Alternatives Before Using “Conditional”
Change “Until Tax Audit” or “Exam” to:
XX Years = Typical Tax Settlement
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Retention Periods:Accounting
Tax Settlement /Exam Cycle
Use Records Holds for Exceptions
May 7, 2012 26
Consider Alternatives Before Using “Conditional”
Separate Projects by Metadata, Libraries, Folders...
Change “Project Completion” to:
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Retention Periods:Projects
Completion to:
Last Action for Specific Project’s Library or Folder
May 7, 2012 27
Cohasset Associates, Inc.
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4.102012 Managing Electronic Records Conference
Consider Alternatives Before Using “Conditional”
Longest Employment Period?
Change “Termination” to:
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RetentionPeriods:Payroll
Termination to:
50 Years (Longest Employment + 7-10 Year Period)
May 7, 2012 28
Consider Alternatives Before Using “Conditional”
Establish 3-Year P&P Review Process
Change “Until Updated” to:
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RetentionPeriods:P&Ps
Updated to:
10 Years (3-Year Review + 7 Year Period)
May 7, 2012 29
Understand Understand CompetingCompetingNeedsNeeds
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Balance Detail Against Simplicity for IT
May 7, 2012 30
Cohasset Associates, Inc.
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4.112012 Managing Electronic Records Conference
Understand that IT HasCompeting Needs
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Fewer Periods
More Detail
May 7, 2012 31
“Finishing” the Retention Scheduleis Just a Beginning
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Q & A
© 2012 May 7, 2012 33
Cohasset Associates, Inc.
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4.122012 Managing Electronic Records Conference
Retention & ESIRetention & ESIPaths to SuccessPaths to Success
Part One
May 7, 2012 34
Christine M. Burns & Carol Stainbrook
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