On June 3, 2020, the IRS announced that, through the end of the year, spousal consents for retirement plan elections may be notarized or witnessed electronically.
Background. Various retirement plan elections may be made electronically. However, if the election requires the consent of the participant's spouse, such as designating a non-spouse beneficiary or electing a form of benefit under a pension plan other than a spousal survivor benefit, the spouse's consent must be either notarized or witnessed by the plan representative. Under existing IRS regulations, the spousal consent was required to be in the "physical presence" of the notary or the plan representative.
Need for Temporary Relief. In response to the difficulty of finding an in-person notary or meeting in-person with a plan representative during the COVID-19 shutdown, the IRS announced that, through December 31, 2020, retirement plans may accept electronic notarizations and witnesses as long as certain requirements are satisfied. The relief is retroactive to January 1, 2020, in the event that plans previously established compliant procedures in the expectation that the IRS would issue relief.
Requirements for Electronic Notarization. An electronic notarization is acceptable if made using live audio-video technology that complies with the applicable state laws concerning electronic notarizations.
Requirements for Electronic Witnessing. An electronic witnessing by a plan representative is acceptable if made using live audio-video technology that complies with each of the following:
(i) The signer must present a valid photo ID to the plan representative during the live audio-video conference;
(ii) The live audio-video conference must allow for direct interaction between the signer and the plan representative;
(iii) The signer must fax or electronically send a legible copy of the signed document directly to the plan representative on the same date it was signed; and
(iv) After receiving the signed document, the plan representative must acknowledge that the signature has been witnessed and send the signed document and acknowledgement back to the signer.
Originally published by Smith Gambrell, on June 2020
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