Option 3 for reasons already stated.  As a passing comment, I note that the
law is by no means as static as commonly thought and interpretation is the
game. I suggest that any organisation would want to be abe to prove an "in
good faith" decision and action process that is informed by a "what if"
analysis based on the worst possible interpretation of the law with regard
to corporate interest.

Knowing what you have had, why you no longer have it as of when, indexed as
to whatever likely angle of inquiry is just good sense.  With regard to
privacy matters, there are "good" and "bad" laws and good and bad
interpretations of same.  In general, an individual who knows you have a
file on him/her is likely to be more satisfied in the knowledge that you can
assure the file is destroyed as of X date than a response that says we have
no record of you at all, so most likely if we had anything it's gone now. 
One must comply with the law, but examine specifics to take a responsible
approach relative to maintaining good customer relations.  In my experience,
there may be more room to maneuver (in some cases) than a simple reading of
the language might imply.

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