TSC-P4.2 Guidance

TSC-P4.2 sits in the SOC 2 Privacy criteria and focuses on a simple audit question: Do you retain personal information in a way that matches what you say you’re trying to do? The requirement is not “delete everything quickly.” It is “retain only what you need,” tied back to explicit objectives such as delivering the service, meeting contractual commitments, supporting security and fraud prevention, and satisfying legal or regulatory obligations.

For a Compliance Officer, CCO, or GRC lead, the fastest path is to treat TSC-P4.2 as an execution problem, not a policy-writing exercise. Auditors will look for alignment across four layers: (1) your stated objectives, (2) your retention schedule and standards, (3) system-level implementation (including backups and SaaS apps), and (4) evidence that deletion and review actually occur.

This page gives requirement-level implementation guidance you can put into motion immediately: who owns what, how to map data to retention, what “good evidence” looks like, and where teams commonly fail (especially around backups, logs, and third parties). Source: AICPA Trust Services Criteria 2017 (TSC-P4.2) (AICPA TSC 2017, 2017).

Regulatory text

Excerpt (TSC-P4.2): “The entity retains personal information consistent with its objectives.” (AICPA TSC 2017, 2017)

Operator interpretation (what you must do)

You must be able to show, end-to-end, that:

1. You defined objectives for retaining personal information (business + legal + service needs).
2. You translated objectives into retention requirements (by data category and system).
3. You implemented retention and deletion controls so personal information is disposed of, de-identified, or otherwise handled when no longer needed for those objectives.
4. You monitor and periodically review retention performance and exceptions, and you keep evidence that proves the controls operated. (AICPA TSC 2017, 2017)

This is evidence-driven. A well-written policy without system execution usually fails.

Plain-English meaning (what auditors are really testing)

Auditors want to confirm you are not keeping personal information “because storage is cheap” or “because it might be useful later.” Under TSC-P4.2, retention must be tied to specific objectives you can defend. That includes:

• Operational objectives (deliver the service, support customers)
• Security objectives (investigations, abuse prevention) when documented
• Legal/contract objectives (tax, employment, contractual recordkeeping) when documented

A practical target state: for each major system containing personal information, you can answer three questions quickly:

1. What personal information is in here?
2. How long do we keep it, and why?
3. How do we enforce and prove deletion or de-identification?

Who it applies to (entity + operational context)

In scope organizations: any organization undergoing a SOC 2 engagement that includes the Privacy category and uses, stores, or processes personal information. (AICPA TSC 2017, 2017)

Common operational contexts where TSC-P4.2 becomes hard:

• Product analytics and event telemetry that includes identifiers
• Support tooling (ticketing, call recordings, chat transcripts)
• HR and recruiting systems (applicants, background checks)
• Marketing systems (leads, enrichment data)
• Security logs that can become personal information depending on identifiers
• Backups, archives, data warehouses, and data lakes
• Third parties processing personal information on your behalf

If you rely on third parties (cloud, SaaS, processors), your retention objectives still apply. You need retention alignment in contracts and operational checks.

What you actually need to do (step-by-step)

Use the sequence below to operationalize quickly without boiling the ocean.

Step 1: Define “objectives for retention” in writing

Create a short, audit-friendly statement of objectives, owned by Compliance and approved by Security + Legal + relevant business leaders. Examples of objective categories:

• Service delivery and customer support
• Security monitoring and incident investigation
• Billing, accounting, and dispute handling
• Legal/regulatory obligations
• Contractual requirements
• Product improvement (only if consistent with your privacy commitments)

Keep it specific enough that a retention schedule can map to it.

Step 2: Build a personal information inventory that is retention-ready

You do not need perfection on day one. You do need a defensible inventory for in-scope systems:

• Systems/applications (including SaaS)
• Data categories (e.g., account identifiers, contact info, user content, recordings)
• Data subjects (customers, end users, employees, applicants)
• Where data resides (production, analytics, backups)
• System owner

Output: a table you can map to retention rules.

Step 3: Create a retention schedule mapped to objectives

For each data category in each system, define:

• Retention period (time-based, event-based, or both)
• Retention trigger (account closure, contract end, ticket closure, last activity)
• Disposition method (delete, de-identify, aggregate, archive with controls)
• Objective rationale (tie back to Step 1)
• Exception process (legal hold, security investigation hold)

Auditors expect coherence: if your privacy notice says you retain “as long as necessary,” your schedule should define what “necessary” means operationally.

Step 4: Implement deletion and de-identification controls in systems

Turn the schedule into mechanisms. Typical control patterns:

• Automated deletion jobs (scheduled tasks) for databases and object stores
• Lifecycle policies for cloud storage
• Application-level deletion flows tied to user/customer requests and retention triggers
• De-identification or tokenization where full deletion is not feasible
• Procedures for non-automated systems (export + purge) with approvals

Include backups and archives explicitly:

• Define whether backups age out on a fixed lifecycle.
• If deletion from backups is not feasible, document compensating controls and backup retention limits, and ensure restores do not reintroduce expired data into active systems without reapplying deletion rules.

Step 5: Extend retention requirements to third parties

For each third party that stores/processes personal information:

• Confirm contract terms cover retention, deletion, and return/disposal.
• Confirm the third party’s platform supports retention controls you need (settings, APIs, admin functions).
• Establish an offboarding checklist that includes verified deletion/return.

Step 6: Establish monitoring, review, and corrective action

Implement a repeatable review cadence that checks:

• New systems added without retention rules
• Retention jobs failing
• Exceptions (legal holds) and their approvals
• Sample-based verification that records older than the schedule are actually gone or de-identified

Document findings and remediation. SOC 2 testing often hinges on this evidence trail. (AICPA TSC 2017, 2017)

Step 7: Prepare for audit testing (design + operating effectiveness)

Auditors typically test:

• Design: policy, schedule, roles, and procedures exist and align to objectives.
• Operation: jobs ran, deletions occurred, exceptions were approved, reviews happened, and issues were fixed.

A practical approach is to maintain a “control packet” per key system.

Required evidence and artifacts to retain

Keep artifacts that prove both intention and execution:

Governance and design artifacts

• Data retention policy (approved, versioned)
• Retention schedule (system-by-system mapping with objectives)
• Data inventory / system register for personal information
• Roles and responsibilities (RACI or equivalent)
• Third-party contract clauses or addenda addressing retention/deletion

Operating evidence (the make-or-break items)

• Deletion job logs, lifecycle policy screenshots/exports, or system reports
• Change records for retention job configuration (tickets, pull requests, approvals)
• Samples showing records beyond retention are deleted/de-identified
• Legal hold register and approvals
• Periodic review minutes/results, including remediation tracking
• Third-party offboarding records and deletion confirmations

If you want this audit-ready without chasing screenshots, teams often centralize evidence collection in a GRC workflow tool (Daydream can store the retention schedule, map it to systems/owners, and collect recurring operating evidence on a schedule).

Common exam/audit questions and hangups

Expect questions like:

• “Show me your retention objectives and where they are approved.”
• “Walk me through one system end-to-end: data types, retention rule, deletion mechanism, and proof it ran.”
• “How do you handle backups and archives?”
• “How do you ensure third parties delete data after termination?”
• “How do you prevent teams from adding new analytics fields that become personal information without updating retention?”
• “Show exceptions: legal holds, security holds. Who approved them and when did they end?”

Hangups usually occur where the schedule exists but isn’t implemented consistently, or where “unknown systems” store personal information outside the inventory.

Frequent implementation mistakes and how to avoid them

Mistake	Why it fails SOC 2	How to fix it
Retention policy is generic (“retain as needed”)	No operational meaning; not testable	Add schedule with triggers, owners, and disposition method per system
Inventory doesn’t include SaaS tools	Personal information spreads fastest in SaaS	Require intake review for new tools; quarterly recon with SSO/app catalog
Backups ignored	Data remains indefinitely	Define backup lifecycle and compensating controls; document restore reprocessing
No evidence deletion ran	Auditors can’t test operating effectiveness	Capture logs/reports and store them centrally with timestamps
Third-party retention assumed	You remain responsible for your objectives	Contract terms + settings validation + offboarding checklist
Exceptions unmanaged	“Temporary” holds become permanent retention	Legal hold register with end conditions and periodic review

Enforcement context and risk implications

SOC 2 is an audit framework rather than a regulatory enforcement regime, so TSC-P4.2 is primarily a customer and auditor expectation tied to the Trust Services Criteria. (AICPA TSC 2017, 2017) Operationally, weak retention control raises:

• Breach impact (more data exposed because you kept it longer)
• Discovery and litigation burden (more records to search and produce)
• Contract risk (enterprise customers often require defined retention and disposal)
• Privacy commitment drift (retention practices diverge from notices and commitments)

Practical 30/60/90-day execution plan

First 30 days: establish control design and stop the bleeding

• Name an owner for retention governance (often Compliance or Security GRC).
• Draft retention objectives and get approval.
• Identify top in-scope systems that store personal information (start with identity, core product DB, support tool, data warehouse, marketing CRM).
• Build a first-pass inventory and retention schedule for those systems.
• Implement at least one deletion control end-to-end in a high-volume system (often support tickets or product telemetry) and start capturing logs as evidence.

Days 31–60: implement across systems and third parties

• Expand inventory to remaining in-scope systems, including key SaaS.
• Configure deletion/de-identification workflows per the schedule.
• Add third-party retention/deletion terms where missing; validate platform settings for major processors.
• Create an exceptions process (legal hold/security hold) with approvals and a register.
• Start a recurring retention review meeting and track remediation items.

Days 61–90: prove operating effectiveness and harden audit readiness

• Run sample-based checks in each key system and document results.
• Validate backup lifecycle settings and document compensating controls where needed.
• Produce “control packets” per system: schedule entry, mechanism, evidence, review artifacts.
• Conduct a mini internal audit: pick two systems and perform a walkthrough as an auditor would.
• Centralize evidence collection and reminders (Daydream is often used here to assign owners, collect recurring evidence, and keep an audit trail without spreadsheet sprawl).

Frequently Asked Questions

Does TSC-P4.2 require a specific retention period (like 7 years)?

No. The requirement is that retention is consistent with your objectives, and you can prove implementation. The retention period must be defined by you, documented, and enforced. (AICPA TSC 2017, 2017)

Are logs considered personal information under this requirement?

They can be, if they contain identifiers that relate to an individual (directly or indirectly). Treat security and application logs as in-scope until you confirm they are de-identified or not linkable in your context.

How do we handle backups where we can’t delete one person’s data?

Document backup retention limits, restrict access, and ensure backups expire. If a restore occurs, reapply retention/deletion rules so expired data does not return to active use.

What evidence is strongest for auditors?

System-generated evidence beats screenshots: deletion job run logs, lifecycle policy exports, ticketed change approvals, and sample queries showing aged records are gone. Pair that with a periodic review record and remediation tracking.

We have multiple products. Do we need separate retention schedules?

You need retention clarity by system and data category. If products have different data flows, separate schedules (or separate sections in one schedule) reduce ambiguity and testing gaps.

How should we manage retention with third-party processors?

Put retention/deletion expectations in the contract, confirm the processor’s settings support your schedule, and require deletion confirmation during offboarding. Track these steps like any other control evidence.

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