How to Create a Retention Policy and Apply it to User Mailboxes in Exchange Online

When a new user account is created in Office 365 and assigned an Exchange Online license, its mailbox is automatically created. That mailbox is assigned a default retention policy which is called Default MRM Policy. 

In this article, we will enable archive mailboxes for users, create new retention tags, and add them to the new retention policy. We will then assign the new retention policy to user mailboxes in Office 365 Exchange Admin Center.

Enable Archive Mailboxes for Users

3. In Security and Compliance Center, Expand Data governance and click Archive.  
4. Select the mailboxes by clicking on the first one in the list, holding the shift key from the keyboard, and then clicking  the last one in the list.
5. Click Enable.

6. During warning, click Yes.

7. Click Close.

8. Click the refresh button to update the mailbox list.

Create New Retention Tags

1. In Security and Compliance Center, click on app launcher  button located on the top right corner and then click Admin.

2. Expand Admin centers and then click Exchange. An Exchange Admin Center will be displayed.

3. In Exchange Admin Center, click ‘retention tags’ in compliance management.

Creating an Archive Default Policy Tag

4. On retentions tag page, click on + and then ‘applied automatically to entire mailbox (default)’. 

5. Provide the name of retention tag, choose ‘Move to Archive’ from Retention action, choose When the item reaches the following age (in days) from Retention period and provide the number of days (In this case, 10395 days or 3 years).
6. Click Save.

Creating a Deletion Default Policy Tag

7. On retentions tag page, click on + and then ‘applied automatically to entire mailbox (default)’. 

8. Provide the name to new retention tag, choose ‘Permanently Delete’ from Retention action, choose ‘When the item reaches the following age (in days):’ and type a value of 2555 days or 7 years (In this case).
9. Click Save. 

Creating a Custom Retention Policy Tag for the Deleted Items Folder

10. On retentions tag page, click on + and then ‘applied automatically to a default folder’.

11. Provide the name to new retention tag, choose ‘Deleted items’ from apply this tag to the following default folder drop down, and choose ‘Delete and Allow Recovery’ from Retention action. Choose ‘When the item reaches the following age (in days):’ from Retention period and type 1825 or 5 years. 
12. Click Save.

Create New Retention Policy

1. In Exchange Admin Center, click ‘Retention policies’ in compliance management and then click +.

2. Type the name of new retention policy. Under retention tags, click + to add retention tags to this retention policy.

3. Add the 9 retention tags shown in the following screenshot. To add a retention tag, select the tag and click add. 

4. When you are done with adding retention tags, click OK.

5. Click Save on the new retention policy page.

Assign New Retention Policy to User Mailboxes
 

1. In Exchange Admin Center, click Mailboxes in Recipients.
2. Select the desired mailboxes by clicking on the first mailbox, holding the shift key and then clicking the last mailbox. 
3. On right side of exchange admin center window, click More options located under bulk edit.

4. Click Update located under Retention Policy.

5. Choose the retention policy from the drop down on the bulk assign retention policy page and click Save.