Key Documents a Plan Sponsor Should Maintain

ARTICLE | January 14, 2026

Is your retirement plan documentation complete and compliant?

As a plan sponsor, your responsibilities go far beyond offering a 401(k). The records you keep are your first line of defense against audits and legal challenges. Unfortunately, many sponsors underestimate how much documentation is needed to support proper plan administration.

Why does this matter?

Every Department of Labor audit, IRS review, or participant dispute starts with a document request. If you can’t provide the right records, a routine inquiry can quickly turn into costly penalties and legal headaches.

Essential Documents to Maintain

1.      Core Plan Documents

·         Plan Document & Amendments

·         Adoption Agreement

·         Summary Plan Description (SPD)

·         Summary of Material Modifications

·         IRS Determination Letter

Your core plan documents establish the legal framework for your retirement plan and define how it operates. This document must be current and reflect any amendments or updates made to stay compliant with changing regulations.

The adoption agreement customizes your plan’s specific provisions, while the Summary Plan Description (SPD) translates complex legal language into participant-friendly terms. Any material changes to the plan require a Summary of Material Modifications to be distributed to participants within prescribed timeframes. Your IRS determination letter provides crucial confirmation that your plan meets tax qualification requirements.

2.      Operational & Compliance Records

·         Form 5500 and Audit Reports

·         Nondiscrimination Testing Results

·         Fidelity Bond

Operational records demonstrate that your plan functions according to its governing documents and applicable law. Form 5500 annual returns and their related schedules provide comprehensive financial and operational information that the Department of Labor and IRS use to monitor plan compliance. These forms, along with any required audit reports for larger plans, create a detailed compliance trail that regulators expect to see.

Nondiscrimination testing results prove that your plan does not unfairly favor highly compensated employees. These tests must be performed annually, and the results should be documented and retained. Fidelity bond documentation protects plan assets from losses due to fraudulent or dishonest acts by plan fiduciaries and should cover at least 10% of plan assets, with minimum and maximum coverage amounts specified by law.

3.      Participant-Level Records

·         Enrollment forms, beneficiary designations, deferral elections

·         Loan agreements and repayment records

·         Distribution and hardship withdrawal documentation, if applicable.

Participant records form the backbone of daily plan administration. Enrollment forms establish each participant’s entry into the plan and their initial elections. Beneficiary designations must be current and properly witnessed or notarized according to plan requirements. Deferral election forms document participant contribution choices and any changes made throughout their participation.

For plans offering loans, loan agreements and repayment records are essential. These documents must demonstrate compliance with maximum loan amounts, repayment terms, and proper security interests. Distribution documentation, including hardship withdrawal approvals and supporting documentation, proves that distributions met plan requirements and applicable regulations.

4.      Financial & Investment Oversight

·         Trust/Custodial Statements

·         Investment Policy Statement

·         Fee disclosures and vendor agreements

·         Minutes from oversight committee meetings

Financial records demonstrate proper plan asset management and fiduciary oversight. Trust and custodial statements provide detailed records of plan assets, transactions, and account balances. An Investment Policy Statement (IPS) documents your fiduciary process for selecting and monitoring plan investments, showing that investment decisions follow a prudent process rather than arbitrary choices.

Fee disclosure documentation and service agreements with plan vendors demonstrate compliance with fee transparency requirements and help establish that you are paying reasonable fees for services received. These records become particularly important if participants question plan expenses or if regulators examine your fee arrangements.

Plan sponsors should meet regularly to review plan operations, investment performance, benchmark fees, and discuss plan features and any required amendments. These meetings should be documented with formal minutes summarizing key discussion points. Proper documentation is essential to demonstrate compliance and support the plan sponsor’s fiduciary responsibilities.

5.      Cybersecurity & Risk Management

·         Cybersecurity policies and incident response plans

·         Vendor security due diligence

In today’s digital environment, cybersecurity documentation has become increasingly critical. Cybersecurity policies and procedures demonstrate that you have considered and addressed potential threats to participant data and plan assets. An incident response plan shows preparedness for potential breaches, while vendor due diligence records prove that you have properly vetted service providers’ security measures.

Best Practices

·         Review documents regularly.

·         Keep copies of all amendments and participant communications.

·         Document any corrections to show good faith compliance.

·         Document plan oversight.

Even plans not requiring formal audits benefit from periodic assessments of their documentation and operations. Regular reviews should verify that operations align with plan documents, comply with IRS and Department of Labor requirements, and incorporate industry best practices. This proactive approach helps identify and correct issues before they become significant problems.

Need help?
Insero & Co. CPAs, LLP specializes in employee benefit plan audits and compliance. We can help you build a documentation system that meets regulatory requirements and supports smooth plan administration. Contact us today to learn more.