ABA Calls for Removal of Physical Presence Requirement for Spousal Consent

In a letter to the Internal Revenue Service this week, the American Bankers Association and several trade groups reiterated their request that the IRS make permanent its temporary relief from the physical presence requirement for spousal consent. The groups made previously requested this permanent relief in a comment letter last October.

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 has offered 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 June 30.

“Remote witnessing has worked well during the pandemic and allowed retirement plan participants to access their benefits without unnecessarily jeopardizing their health by physically meeting with a notary public or plan representative,” the groups noted. “These personal and public health benefits, however, have not been the only benefits resulting from the use of remote witnessing. Specifically, remote witnessing has proven, under the [IRS’] temporary relief, to be more secure and more convenient than physical witnessing.” Given that, the trade groups urged the IRS to make the relief permanent.