In a letter to the Internal Revenue Service yesterday, the American Bankers Association and several insurance trade groups requested that the IRS make permanent temporary relief from the physical presence requirement for spousal consent.
Under IRS regulations, retirement plans must obtain spousal consent for certain distributions and beneficiary elections, which must be witnessed by a notary or plan representatives. However, the IRS issued a notice offering temporary relief from that requirement for any participant election witnessed by a notary public of a state that permits remote electronic notarization, or witnessed by a plan representative that electronically meets certain requirements. This temporary relief is set to expire Dec. 31.
ABA noted that this temporary relief from the IRS “is an example of the government’s rapid and flexible response to the COVID-19 pandemic and was welcomed by the retirement plan community” and that “remote notarization has been proven successful, is popular with participants and is quickly gaining broad acceptance in states.” Given that, the trade groups urged the IRS to make the relief permanent.
