In my comments about my views on the use of Permanent as a retention period, I said that the longest retention period you can have is Life of Legal Entity.

It seems that some people have implied the disposition of destruction to this period of retention even though that is not the sole outcome.  In fact, we know that there are three legitimate forms of disposition that are available to us.  Records can be transferred - in this action, the records are transferred but the original organization retains ownership of them.  This is kind of hard to do when the original entity ceases to exist.  The second form of disposition is accession in which both the records and their ownership/retention authority/responsible is given to another organization.  The last form of disposition is, in fact, the destruction of the records.

Larry Medina presented some interesting points in his comments:

> Manufacturer of Consumer Goods- Just because the legal entity ceases to

exist it doesn't relieve SOMEONE of liability in the event of a mechanical

failure, death by exposure, long term health issue or other malfeasance.  >

This sounds like wishful thinking, much like Larry's comment to my suggestion that PERMANENT be removed from our vocabulary.  If Larry will pardon me, this also sounds like government-speak.

Thanks to Peter Kurilecz, through his RAIN "fall" efforts, Peter directed me to the records retention proposals published by the Financial Services Commission of Ontario in regards to pension plan records.  In these proposals, the Commission addresses those businesses that become insolvent and, later, those businesses that close down - no longer exist.  The Commission says that in both cases, the administrator of the pension plan is responsible for retaining the records.  In my opinion, placing responsibility, without establishing the consequences of not following through on these responsibilities has little value.  I responded to these proposals with such a question - is the Commission going to sue or place a lien against the insolvent, or non-existing, business, are they going to hold former employees either criminally or financial liable for this failure?  Without establishing the consequences for not carrying out their responsibility, assigning responsibility has little meaning.

Larry added: > In addition, if the legal entity sells their business to another, they are likely entitled to the records that were held by the prior entity. >

This is absolutely true and does not impact the Life of Legal Entity retention period.  The records of the acquired company now belong to the purchasing company and fall under its retention authority/responsibility.  The longest retention period can even be assigned to some of these records - Life of Legal Entity (the purchasing company).

Larry points out that: > Medical Practice, Corporation or Physician- If a practice dissolves (ceases to exist as an entity) the records of patients they treated must still be retained, and in the case of an Oncologist, the records have an extended retention that may exceed multiple entities. >

We know that best practice is to return the records to the patients or, through accession, having other organizations take responsibility and the cost of these records.  Again, thanks to Peter and others on this listserv, we have also seen horror stories where patient records have turned up in dumpsters.

Larry notes: > Government Contractor- Most contracts include "Rights and Ownership" clauses for records that require an entity to transfer all records created or received at completion of the contract to the Federal Agency or the successor contractor as part of the FAR and DEAR clauses. >

Having the longest retention period of Life of Legal Entity does not preclude contractual arrangements for the ownership and retention authority/responsibility for the records.

In regards to: > Employer whose employees may be exposed to potentially harmful or known harmful substances- Both States and the Federal Government have requirements that these records be retained for lengthy periods of time (typically 75 years beyond separation from employment) in the event of health issues and claims from future generations of family members. If the entity ceases to exist, the records must be turned over to someone else. >

Accession of the records to another entity covers this.

Retention of records is a complex undertaking.  No wonder we need to fight the urge in others to just make the retention PERMANENT.

Carl E. Weise  CRM, ermm, ecmm, emmm, bpms, ioas
Industry Advisor

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