The IRS has issued a proposed rule to make permanent temporary relief from the physical presence requirement for participant elections and spousal consents. The agency previously waived in-person witness requirements because of the COVID-19 pandemic, but only on a temporary basis. The American Bankers Association, along with financial and retirement trade groups, have since advocated for express authority to provide for remote witnessing procedures as an option for retirement plan participants, including those with mobility limitations, who work non-traditional schedules, or who live in more remote areas.
If finalized as proposed, the regulation would provide for the use of an electronic medium (for example, live audio-video technology) for participant elections and spousal consents in connection with the administration of 401(k) plans and certain other retirement plans. The proposal includes requirements designed to ensure authentication and retirement investor protections.