Regulatory Update: IRS Issues Temporary Relief from Spousal Consent Physical Presence Requirement

On June 3, the IRS issued Notice 2020-42 providing temporary relief from the requirement that spousal consent to retirement plan distributions, loans and beneficiary designations occur in the physical presence of a notary public or plan representative. For the period from January 1, 2020, through December 31, 2020, the physical presence requirement is deemed satisfied under the following two scenarios:

1) A notary public witnesses a remote notarization using live audio-video technology in accordance with state law requirements applicable to the notary.
2) A plan representative witnesses a participant election if live audio-video technology is used that satisfies the following requirements:

• The spouse presents a valid photo ID to the plan representative during the live audio-video conference;
• The live audio-video conference allows for direct interaction between the spouse and the plan representative;
• The spouse transmits by fax or electronic means a legible copy of the signed document directly to the plan representative on the day it was signed; and
• After receiving the signed document, the plan representative acknowledges that he or she witnessed the signature in accordance with the requirements of the IRS relief and transmits the signed document, including the acknowledgment, back to the spouse.

Read the IRS notice and articles from the JD Supra and Venable LLP.

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