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01/03/2023
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The Data Retention Policy Explained

What is Data Retention?

Data retention refers to the practice of storing data for a specified period of time before either deleting or archiving it. Data retention policies determine how long data is kept, what type of data is kept, and who has access to it. The purpose of data retention is to ensure that organizations have access to the data they need for legal, regulatory, and business purposes, while also protecting the privacy and security of sensitive information.

Data retention policies can vary greatly depending on the type of data being stored, the industry in which the organization operates, and the relevant laws and regulations. For example, financial institutions may be required to retain customer data for several years to comply with regulatory requirements, while healthcare organizations may need to retain patient data for even longer periods of time to comply with privacy laws.

Effective data retention policies can help organizations maintain a manageable amount of data, minimize the risk of data breaches, and reduce the cost of storing and managing large amounts of data. However, it is important for organizations to carefully consider their data retention policies and regularly review and update them as necessary to ensure they are in compliance with changing laws and regulations.

Data retention is an important aspect of data governance, as it relates to the management of personal data over time. Organizations must ensure that they retain personal data for only as long as is necessary for the specific purposes for which it was collected, and that they delete the data once it is no longer required. This requires clear policies and procedures for data retention, as well as regular review and disposal of data that is no longer needed.

The Need for a Data Retention Policy

Data Retention Policies for Organizations

Organizations need a data retention policy for several reasons, including:

  • Legal and regulatory compliance: Many industries are subject to laws and regulations that dictate how long certain types of data must be retained and what must be done with the data after the retention period ends. A data retention policy helps organizations comply with these requirements and avoid legal or regulatory penalties.
  • Efficient data management: By specifying how long data is kept, a data retention policy helps organizations maintain a manageable amount of data, reducing the cost and complexity of storing and managing large amounts of data.
  • Data privacy and security: Retaining data for extended periods of time increases the risk of data breaches and unauthorized access to sensitive information. A data retention policy can help organizations minimize these risks by specifying when data must be deleted or archived and who has access to it.
  • Business continuity and risk management: A data retention policy can help organizations ensure they have access to the data they need in the event of a disaster or other disruption, improving their ability to recover from adverse events and minimize the impact on their operations.
  • Cost savings: By reducing the amount of data stored, a data retention policy can help organizations save on storage costs and other expenses associated with managing large amounts of data.

In short, a data retention policy is an important tool that helps organizations manage their data effectively, maintain compliance with laws and regulations, and reduce risks to their operations and reputation.

Data Retention Policies for U.S. Government Organizations

Data retention policies are mandatory for U.S. government organizations, including federal agencies, state and local governments, and other public sector entities.

The U.S. Federal Records Act requires federal agencies to preserve and manage their records, including electronic records, in accordance with regulations and guidance issued by the National Archives and Records Administration (NARA). The NARA provides guidance on how long certain types of records must be retained, and federal agencies must develop and implement data retention policies to ensure they comply with these requirements.

In addition, many U.S. state and local governments have their own data retention requirements, and there are a number of laws and regulations that apply specifically to certain industries, such as healthcare, finance, and education.

The U.S. government takes data retention policies and data management seriously, and non-compliance with data retention requirements can result in legal penalties, fines, and reputational damage. As a result, it is critical for U.S. government organizations to develop and implement effective data retention policies that comply with all relevant laws and regulations.

Data Retention Policies in Europe

In Europe, the General Data Protection Regulation (GDPR) includes provisions on data retention. The GDPR requires that personal data be kept in a form that allows identification of data subjects for no longer than is necessary for the purposes for which the personal data are processed. In other words, organizations must ensure that they only retain personal data for as long as it is required to fulfill the specific purposes for which it was collected, and that they delete the data once it is no longer necessary.

The GDPR also requires that organizations implement appropriate technical and organizational measures to ensure that personal data is deleted securely, taking into account the level of sensitivity of the data.

The GDPR requires that organizations have a clear and defined data retention policy, that they implement appropriate measures to ensure that personal data is only retained for as long as is necessary, and that they securely delete personal data once it is no longer required.

Structuring a Data Retention Policy

Components of a Data Retention Policy

A data retention policy should be structured in a way that clearly defines the purpose, scope, and requirements of the policy. Here are the key components of a typical data retention policy:

  1. Purpose: Explain why the data retention policy is being created, what problem it is meant to solve, and what the overall goals of the policy are.
  2. Scope: Define the types of data covered by the policy, including both physical and electronic formats, and any specific data systems or applications that are included.
  3. Retention periods: Specify how long each type of data must be retained and what must be done with the data after the retention period has ended, such as deletion or archiving.
  4. Access controls: Specify who has access to the data, who is responsible for managing it, and what security measures must be in place to protect sensitive data.
  5. Compliance: Explain the procedures and processes that must be followed to ensure compliance with the data retention policy, including regular audits, reviews, and training.
  6. Exceptions: Specify any exceptions to the policy and how they will be handled, such as data that must be retained for legal or regulatory reasons.
  7. Updates: Explain how the policy will be reviewed and updated over time to ensure it remains relevant and effective.

It is important to involve all relevant stakeholders in the development of the data retention policy, including legal, IT, security, and business departments, to ensure that the policy is comprehensive, effective, and well-supported. The policy should also be reviewed and updated regularly to reflect changes in the organization, laws, and regulations.

Approval

The approval of a data retention policy typically depends on the size and structure of the organization. In general, the following groups of people may be involved in the approval process:

  • Legal department: The legal department is responsible for ensuring the policy complies with all relevant laws and regulations, and may need to review and approve the policy.
  • IT department: The IT department is responsible for implementing the technical aspects of the policy, such as data storage and access controls, and may need to review and approve the policy.
  • Security department: The security department is responsible for protecting the organization’s data and may need to review and approve the policy to ensure it aligns with the organization’s security policies and procedures.
  • Business unit leaders: Business unit leaders may need to review and approve the policy to ensure it aligns with the needs and goals of the different business units within the organization.
  • Executive leadership: The CEO, CIO, or other senior executive may need to review and approve the policy to ensure it has the support and commitment of the organization’s leadership.

In some organizations, the policy may also need to be approved by a board of directors or other governing body. The approval process will vary depending on the organization’s size, structure, and culture, but it is important to involve all relevant stakeholders to ensure the policy is comprehensive, effective, and well-supported.

Draft Data Retention Policy Template

Here is a draft template for a data retention policy:

  1. Introduction
    • Purpose: To establish a data retention policy to ensure that the organization’s data is properly managed, preserved, and disposed of in accordance with legal and regulatory requirements and best practices.
    • Scope: The policy applies to all data created, collected, stored, and processed by the organization, regardless of format or location.
  2. Retention periods
    • Specify the retention periods for different types of data, such as financial records, customer information, employee records, and others.
    • Provide guidance on how to determine the appropriate retention period for specific types of data based on legal and regulatory requirements, business needs, and best practices.
    • Explain what must be done with the data after the retention period has ended, such as deletion or archiving.
  3. Access controls
    • Specify who has access to the data, who is responsible for managing it, and what security measures must be in place to protect sensitive data.
    • Explain how access to the data will be monitored and audited to ensure compliance with the policy.
  4. Compliance
    • Explain the procedures and processes that must be followed to ensure compliance with the policy, including regular audits, reviews, and training.
    • Explain what steps will be taken to address non-compliance with the policy, such as disciplinary action, legal action, and others.
  5. Exceptions
    • Specify any exceptions to the policy and how they will be handled, such as data that must be retained for legal or regulatory reasons.
    • Explain the process for obtaining an exception, including who must approve the exception and what criteria will be used to evaluate the request.
  6. Updates
    • Explain how the policy will be reviewed and updated over time to ensure it remains relevant and effective.
    • Explain the process for updating the policy, including who will be responsible for making changes, what criteria will be used to evaluate changes, and how changes will be communicated to stakeholders.
  7. Conclusion
    • Summarize the key points of the policy and emphasize the importance of following the policy to ensure the proper management, preservation, and disposal of the organization’s data.

Note that this is just a sample template, and the specific requirements of your organization’s data retention policy may differ based on your specific needs, laws and regulations, and other factors. It is important to work with legal, IT, security, and business departments to develop a comprehensive and effective data retention policy that meets the needs of your organization.

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