The Internal Revenue Service (IRS) requires that spousal consent to the waiver of a qualified joint and survivor annuity in a defined benefit plan must be signed in the “physical presence” of a plan representative or notary. Some plan administrators go further and require that other retirement plan election documents be notarized as well. On June 3, 2020, in response to challenges posed by the COVID-19 pandemic, the IRS issued Notice 2020-42, which provided temporary relief from the physical presence requirement in Treasury Regulation Section 1.401(a)-21(d)(6).
Due to the continued significant risk to public health and safety from the ongoing pandemic, the IRS has extended the temporary relief from the physical presence requirements several times, including the latest extension through December 31, 2022 in Notice 2022-27. The Notice states that extension of the temporary relief beyond the end of 2022 is not expected to be necessary. Until December 31, 2022, plan administrators can continue following the relief rules summarized below.
The physical presence requirement for a notary is deemed satisfied if:
- Live audio-video technology is used, and
- The process follows all state law requirements that apply to notaries public.
In order for the physical presence requirement to be satisfied by a plan representative, the following must occur:
- Live audio-video technology which allows for direct interaction between the individual and the plan representative,
- The individual signing the election must present a valid photo ID to the plan representative during the live audio-video conference,
- The individual must transmit a copy of the signed document by fax or electronic means 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 and transmit the signed document with acknowledgment back to the individual.
To ensure your remote waiver process meets all the requirements under IRS Notice 2022-27, reach out to your legal counsel. For questions and/or guidance implementing or continuing the remote waiver process, contact your Bolton consultant.