If you work in the retirement and health plan industry, then you have heard of the Employee Retirement Income Security Act of 1974 (more commonly known as ERISA). What you may not know is that digitizing your documents allows you to easily stay in compliance with this law.
Document management and scanning are crucial components of ERISA compliance for benefit funds, especially those also subject to Taft-Hartley compliance, for several key reasons:
Record Retention Requirements
ERISA mandates that plan administrators maintain comprehensive records to demonstrate compliance. These include plan documents, financial records, participant communications, and trustee meeting minutes. Proper document management systems ensure these records are preserved for the required periods.
Additionally, retention rules can be set at multiple levels (folder, project, document, etc.) so that documents are flagged for deletion when they reach the end of their lifecycle. Unless it’s a particular record that needs to be kept permanently, many of these records have a required retention period of six years. Be sure to confirm retention schedules with your legal department before deletion.
Read more about record retention for multiemployer funds.
Fiduciary Evidence
Documentation serves as evidence that trustees are fulfilling their fiduciary duties. Proper scanning and archiving of investment decisions, due diligence reports, and vendor selection processes can help demonstrate prudent management and promote transparency.
This also allows for quick search and retrieval should there be any verification required.
Claims Processing
Plans must maintain detailed records of participant eligibility, contributions, and benefit calculations. Digital document management systems enable efficient access to these records when processing claims and appeals.
Digitized claims also allows for automation of all or part of the process which can free up employees for other work.
Audit Preparation
Department of Labor (DOL) and IRS audits require extensive documentation. Efficient scanning and indexing of documents allow plans to quickly produce requested materials. Not only does this make the audit process less stressful, but it also shows regulators you take compliance seriously right from the start.
Participant Disclosures
ERISA requires various disclosures to plan participants. Document management systems help track what communications were sent, when, and to whom. Additionally, automation can assist in preparing and sending disclosures.
Business Continuity
Digital document management provides protection against physical document loss from disasters and ensures continuous operations. No matter what happens, your plan will have a backup of all important information.
Security and Confidentiality
ERISA plans contain sensitive personal information. Modern document management systems incorporate security features to protect this data in compliance with privacy requirements. This includes limiting access to the documents via permissions or user levels, redacting information on the documents so only those with top security can see private information, and/or using passwords to unlock certain folders.
As you can see, transitioning from paper-based to digital document management systems help any plan improve compliance efficiency, including ERISA. Additionally, digital documents have a broad range of benefits like reducing administrative costs.
If you would like to learn more about starting or continuing your plan’s digital transformation, we would love to help. Contact us or give us a call at (630) 321-0601!
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