IRS Grants Relief for Spousal Consents and Participant Elections under Qualified Retirement Plans

In response to the COVID-19 pandemic, the IRS has granted temporary relief from the in-person notarization and witness requirements for spousal consents under qualified retirement plans.

From January 1, 2020, to December 31, 2020, participant elections (including spousal consents, participant elections, agreements, or communications) required to be notarized or witnessed by a plan representative may be executed electronically provided the following requirements are met:

• For participant elections that must be witnessed by a notary public, the physical presence requirement is deemed to be satisfied for an electronic system that uses remote notarization if executed via live audio technology and that otherwise complies with state notarization law requirements.
• For participant elections that must be witnessed by a plan representative, the physical presence requirement is deemed to be satisfied for an electronic system that uses live audio-video technology and satisfies the following:
  • The individual signing the election must present a valid photo ID to the plan representative during the live audio-video conference;
  • The live audio-video conference must allow for direct interaction between the signing individual and plan representative (a pre-recorded video will not be sufficient);
  • The signing individual must transmit by fax or email a copy of the signed document directly to the plan representative on the same date it was signed; and
  • After receiving the signed document, the plan representative must acknowledge that the signature was witnessed by the plan representative in accordance with these requirements, and then transmit the signed document (including the acknowledgement) back to the individual.

While these relaxed rules come as a welcome relief to plan administrators and participants alike, note that these rules are only temporary and apply only to retirement plan elections and not to health and welfare benefit plans.