Relief for Certain Retirement Plan Consent Requirements

The Internal Revenue Service (IRS) today issued Notice 2020-42, in which the IRS provides temporary relief from the physical presence requirements for certain elections that are made by participants and beneficiaries in qualified retirement plans and other tax-favored retirement arrangements. This includes signatures of those making an election that ordinarily would need to be witnessed in the physical presence of a plan representative or notary public, including spousal consent and certain forms of distribution from retirement plans.

The guidance is being issued in consideration of business shutdowns and social distancing in response to the coronavirus (COVID-19) pandemic. The IRS notes that it is intended to facilitate the payment of coronavirus-related distributions and plan loans to qualified individuals, as permitted by the CARES Act.

Under this relief, for 2020 distributions, live audio-video technologies may be used to facilitate remote notarization if meeting other election requirements and if this is consistent with state laws governing notarization. Also for 2020, for certain plan elections that must be witnessed by a plan representative, witnessing may be accomplished by live audio-video technology, but only if certain access, security, review, and confirmation conditions are met.