The effect of the word permanent “is rarely pure and never simple”[1] when it comes to records management. In the post-GDPR world, how you interpret and implement the word “permanent” into your retention schedule—as either a long-term retention period[2] or a hardcopy format—could cost you significantly.
The Association of Records Managers & Administrators (ARMA) defines a permanent record as “determined to have sufficient historical, administrative, legal, fiscal, or other value to warrant continuing preservation.”[3] But what exactly does continuing preservation mean? Does it refer to the period of time you are supposed to retain information, or could it mean the format in which you retain a record?
Legislation is hardly helpful at clearing up the puzzle between permanent retention period and permanent format. Take for example 522 Code of Massachusetts Regulations 3.05, which requires owners or users of nuclear reactor facilities to “keep permanent records to maintain complete traceability of all material used in the construction of any nuclear reactor plant.” Compare that language to 20 New York Codes, Rules and Regulations 39.1 which says, “Every taxpayer must keep permanent books of account or records, including inventories and other pertinent data, as are sufficient to establish the amount of receipts, premiums, gross income, assets, capital, gain, loss, deductions, credits or other matters required to be shown by such taxpayer in any report or return required.” Both of these laws require parties to “keep permanent records”, so how should companies interpret the competing meanings of permanent?
One solution for the interpretation of “permanent records” is to look at common practice standards within the business field. Taking the above examples, it is commonly practiced and required for nuclear facilities to keep material and construction records for the life of the facility, a long-term retention period. On the other hand, it is less common for taxpayers to keep accounting records for the entire life of the corporation or business. In fact, most states generally do not require taxpayers to keep accounting records beyond six or seven years. This would suggest that such references to “permanent records” are meant to be kept in a permanent format rather than a permanent retention period.
Another solution to interpretation is to look at similar requirements in other laws within the same jurisdiction. New York Consolidated Law Service Tax 25, for example, requires taxpayers to “retain all relevant correspondence, memoranda, notes, valuation studies, meeting minutes, spreadsheets, models, opinions…and all other records or documents related to the disclosure, filing and list maintenance requirements…for six years”. It is not likely that taxpayers must keep tax documentation for six years and also for the life of the corporation. The need for such records long-term for “historical, administrative, legal, fiscal” value is implausible. Much more probable is the requirement to maintain tax documentation in a format that tax authorities can easily read and inspect.
Without further research and context, laws containing “permanent” language should rarely be taken at face value. Consider the implications of choosing one interpretation over the other before applying “permanent” to your retention schedule. Keeping a record long-term can infringe upon laws with maximum retention requirements. On the other hand, maintaining a record in a permanent format can create logistical recordkeeping issues. Check within your industry and compare similar laws before applying or not applying a long-term retention period. “Permanent” may call itself so, but its true name is usually “format”.
[1] Oscar Wilde, The Importance of Being Earnest (1895).
[2] For general information on how to cite a permanent retention period, see “What does a Permanent Retention Period Really Mean?” by Rick Surber.
[3] ARMA, Glossary of Records Management and Information Governance Terms, 5th ed., p. 38.
Disclaimer: The purpose of this post is to provide general education on Information Governance topics. The statements are informational only and do not constitute legal advice. If you have specific questions regarding the application of the law to your business activities, you should seek the advice of your legal counsel.