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What Is a Data Retention Policy? Best Practices + Template

A data retention policy is a document that outlines a company’s protocols for saving and retaining data in accordance with compliance and regulation requirements.
Media - Anthony Gagliardi

by Tony Gagliardi

November 29, 2023
What Is a Data Retention Policy?Data Retention Policy Best Practices7 Data Retention Policy BenefitsData Retention Policy ChallengesHow to Create a Data Retention Policy: 8 StepsData Retention Policy Template How Data Retention Policies Help Achieve Legal and Regulatory ComplianceSupport Your Data Retention Policy With Drata

More than 328 terabytes of data are created every day. Organizations constantly collect, store, and archive sensitive records like personal identification numbers, medical records, and private contracts. Collected data of this magnitude can be difficult to protect, especially for companies lacking continuous compliance.

With data growing as a precious commodity and collection opportunities expanding, the need for regulated information storage is a priority. Data retention policies are designed to protect and preserve the availability of records and data, without compromising business growth. Dive into our article to learn more about data retention best practices and challenges and how to create a policy.

What Is a Data Retention Policy?

A data retention policy is a company’s protocol for how it maintains data in accordance with regulatory and contractual obligations. Data retention policies must include specific guidelines for storage management, including time commitments and disposal requirements.

Also known as the Records Retention Policy, it clarifies data handling and holding timelines, storage system requirements, and data formations. Thorough policies also establish a business’s data collection requirements.


Why Is a Data Retention Policy Important?

A data retention policy is important because it provides a business with specific data management guidelines. This ensures data is only kept as long as necessary, which frees up storage space, improves organization, and increases efficiency.

What Is a Data Retention Period?

A data retention period is the amount of time an organization stores data. This period differs for different types of data but should only be as long as the information is useful to a company. Review compliance frameworks and laws governing your industry before determining the retention period for your data policy. 

How Long Can Data Be Kept?

Data storage and retention limits depend on the type of information collected ,its intended use, regulations governing that information, and contractual obligations. Best practice dictates that data should be archived or destroyed after fulfilling its purpose.

Data use and storage lifecycle depends on its data classification. Classified data with short storage timelines, like emails, can be configured for automatic deletion. Other records, like contracts and authorizations, must be stored for years before archival or deletion. 

For example, the Payment Card Industry Data Security Standard (PCI DSS) outlines specific data storage requirements. If there is a recorded and authorized business need, credit card information storage may only occur until the data is processed. It must then be destroyed. If an organization has the legal right to store data for extended periods, it takes on the liability associated with information storage.

Data Retention Policy Best Practices

In addition to data storage timelines, organizations should follow these data retention policy best practices.


Identify Legal Regulations

Research and identify applicable legal regulations that govern the data your organization collects, stores, and handles. Incorporate these regulations into internal data retention and deletion policies to guarantee your organization abides by them. It is best to consult with your legal counsel to ensure all relevant laws are accounted for.

Identify Business Obligations

In addition to legal regulations, a record retention policy must consider business requirements and customer contractual obligations. Some internal mandates may require data storage for extended periods of time. You'll need to incorporate these guideline differences into your retention policies.

Consider Data Types

Data retention policies need to consider the data classification and the types of information your organization collects, stores, and handles. Write policies and addendums that prioritize valuable data, specify what types should be retained, and clarify guidelines and timelines associated with each.

Collaborate Internally

Data retention policies must represent the needs of an entire organization. Prioritize internal collaboration when creating and maintaining retention policies to uphold laws and regulations for multiple organizational branches and business units. Consider including your internal legal, finance, IT, and accounting departments to create a comprehensive policy.

Invest in Archiving Software

If your data retention policy outlines unique storage timelines, you may want to consider investing in archiving software. An archival system frees up readily-available storage space while maintaining the availability of archived data, which simplifies extraction, organizes information, and decreases storage costs. Archival software can also automate compliance and data lifecycle management.

Prioritize Data Lifecycle Management

Whether an organization is operating routinely or actively involved in litigation, data lifecycle management should be a priority. Adopt systems and structures designed to automate or pause the management process to reduce early data deletion and loss or interference.

Create Backups

Prioritize data security and regularly back up stored data. Updated backups will help keep an organization in compliance and ensure data availability. They can also reduce or eliminate the possibility of data loss due to outages, downtime, pauses, or other disturbances.

Uphold Proper Policies

To achieve regulatory compliance, organizations must document data retention requirements. Draft and maintain formal documents outlining these requirements, and consider creating additional documentation that you can distribute more widely. Update these documents regularly with requirement changes to satisfy mandates and educate stakeholders.

Be Transparent

Communicate with your customers and stakeholders. Don’t hide your collection efforts, and be forthright about your policy regulations. Allow your customers to control their data usage where possible and provide simplified copies of your data retention policy to users. 

7 Data Retention Policy Benefits

Along with achieving compliance with regulations and contractual obligations, data retention policies provide companies with various organizational- and data-specific benefits:

  1. Data accessibility: Organized data storage and archival systems enhance the accessibility of useful data and decrease request and response time.

  2. Automatic compliance: Organizations who implement a well-documented retention policy can demonstrate contractual and regulatory compliance.

  3. Reduced fines: Adhering to data storage and retention requirements allows organizations to minimize fines associated with non-compliance.

  4. Reduced storage costs: Data retention policies decrease the amount of data a company stores, freeing up storage space and costs.

  5. Increased relevancy: Retention policies suggest retirement and disposal criteria for irrelevant data, which makes storage available for relevant information.

  6. Decreased legal discovery: Comprehensive data disposal policies and procedures help prevent retired data from resurfacing during legal procedures.

  7. Enhanced recovery: Clearly outlined data recovery processes benefit companies during collection and storage disruptions.


Data Retention Policy Challenges

Data retention policies significantly reduce information collection and storage challenges. However, stringent policies still come with drawbacks, including:

  • Data disposal: Adhering to removal guidelines and securely disposing of organizational information is necessary when it exceeds a policy’s storage and archival timelines.

  • Storage: Data collection continues to increase, which decreases storage and increases organizational limitations. Even backup data and archived information can hamper collection and storage efforts. 

  • Retention schedules: Different types of data require unique retention timelines. Outlining, approving, maintaining, and following a record retention policy with multiple timelines can be difficult.

How to Create a Data Retention Policy: 8 Steps

While many organizations outsource the creation of a data retention policy, it’s certainly possible to outline and implement one internally. The internal design process consists of eight steps.


1. Assign Responsibility

To design a data retention policy, you need a team of industry experts. Assign a team of individuals with information technology and legal expertise from across your organization. This team will be responsible for the policy’s research, creation, and implementation. 

2. Determine Legal Requirements

A record retention policy must meet or exceed the expectations required by external data regulations. Require your policy team to consider the timeframes outlined within these documents before suggesting guidelines for internal documents. 

3. Define Business Requirements

While data regulations drive retention timelines, so do business requirements. Consider how long your organization needs to use and maintain information and work these timelines into your policy guidelines—especially if your needs exceed legal retention requirements. At this stage, it’s also best to identify and incorporate archival timelines and disposal expectations into your guidelines. 

4. Create an Internal Audit Process

Identify and classify the data your organization stores. Recognize the storage and archival timelines your organization must adhere to and audit your current management processes for gaps where your company is non-compliant with regulatory frameworks and industry laws. 

5. Identify Revision Frequency

To stay compliant, you need to update your data retention policies when compliance laws and regulations change. Identify when your team needs to focus on policy reviews following any changes on regulations and/or contractual compliance requirements. Consider also creating dedicated timelines or assigning the responsibility for emergency policy updates to ensure continued compliance.

6. Set Up Governance Expectations

Collaborate with HR teams or legal departments about policy enforcement. Your organization should write governance policies outlining team expectations, information collection and storage guidelines, and archival and disposal projections.

7. Decide Implementation Requirements

In addition to governance expectations, outline your team’s implementation requirements. This should include when and how your data retention policy takes effect. Be sure to also clarify and include information collection, handling, storage, and disposal timelines within your policy’s implementation requirements.

8. Write and Approve Data Retention Policy

After collecting and analyzing your preliminary expectations and requirements, write a formal data retention policy. Consider your team’s needs and compliance laws equally to design a flexible yet authoritative document. This policy will need to be approved by your organization’s key internal and external stakeholders before implementation can begin.

Data Retention Policy Template 

Creating internal data retention policies can be complicated. If done incorrectly, organizations may face legal repercussions and other negative consequences, including loss of customer trust and dissatisfaction. To simplify the process, consider utilizing a data retention policy template to correctly outline your legal and business requirements.


Download the Data Retention Policy Template

Word Doc | Adobe PDF

It is mandatory for data retention policies to prioritize data retention laws. By abiding by these legal requirements, record retention policies regulate and automate storage, archival, and disposal processes, which creates predictable and repeatable organizational systems. 

Transparency into the use and storage of personal data is a guaranteed condition of a legal record retention policy. Data retention policies require organizations to abide by data guidelines and regulatory compliance expectations, especially those with specific policy requirements, like:

These records must be protected by the companies collecting and retaining them. Data retention policies guarantee specific regulations are met, which enforces adherence to storage and archival requirements.

Support Your Data Retention Policy With Drata

Valuable resources require extensive protection. Support the creation and maintenance of your data retention policy by automating your compliance journey with Drata

Our compliance experts can help you better manage and store your data to comply with industry frameworks like GDPR and HIPAA. And because a data retention policy is only one aspect of your policy library, Drata's Policy Center offers a variety of auditor-approved templates so teams don’t have to start from scratch.

Schedule a demo with our team to learn more today.

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Tony Gagliardi
Tony Gagliardi's area of expertise focuses on on building sound cybersecurity risk management programs that meet security compliance requirements. Tony is a Certified Information Systems Security Professional (CISSP) specializing in GRC, SOC 2, ISO 27001, GDPR, CCPA/CPRA, HIPAA, various NIST frameworks and enterprise risk management.

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