If you choose simple click counts method, then you don’t need anything in your privacy policy related to Pretty Links as no IP or other data is stored in the DB about the user.
If you do not choose simple click counts method, then I would recommend setting this: https://cspf.co/rZav/Image%202018-05-15%20at%2010.12.12%20AM.png
It will auto-trim clicks after 90 days.
Then in your policy you can state that the IP address is stored from users who click on shortened links on the site,for 90 days and is not shared with any 3rd parties (aside from possibly your webhost who would have access to your database and logs).
The data is used/processed to the extent that you as the site owner or whomever you provide access to your wp-admin – utilize the reports on the Pretty Links -> Clicks page.
We do have plans to anonymize the IP’s to help ease the burden of GDPR while using Pretty Links.