September 19, 2021

Volume XI, Number 262

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IRS Extends Temporary Relief from “Physical Presence” Requirement for Certain Retirement Plan Elections

On December 22, 2020, the Internal Revenue Service (“IRS”) issued an advance version of Notice 2021-03 (the “Extension Notice”) to extend the temporary relief from the “physical presence” requirement for participant elections under retirement plans that was previously granted in Notice 2020-42 (the “Relief Notice”).

As a general rule, retirement plan elections that require the signature of the participant must be witnessed in the physical presence of a plan representative or notary public. Although the term “participant election” is used in the regulatory guidance and the Notices, the physical presence requirement – and the relief – applies for any consent, election, request, agreement or similar communication from a participant, beneficiary, alternate payee, or an individual entitled to benefits under a retirement plan, employee benefit arrangement, or individual retirement plans where a physical presence is required. For example, the election to waive a qualified joint and survivor annuity benefit from a retirement plan.

In response to the ongoing coronavirus pandemic, the Relief Notice temporarily waived the “physical presence” requirement for elections witnessed by either a notary public or a plan representative, when certain requirements are met. For example, for elections witnessed by either a notary public or a plan representative, live audio-video technology must be used to witness the election. The applicable requirements are discussed in detail in our June 4, 2020 blogpost.

The temporary waiver of the physical presence requirement under the Relief Notice was set to expire on December 31, 2020. In the Extension Notice, the IRS provided that the temporary relief will remain available from January 1 through June 30, 2021, subject to the same terms and conditions as under the Relief Notice. For example, for relief from the physical presence requirement for elections witnessed by a notary, the election must be in a state that permits remote electronic notarization.

The Extension Notice also includes a request for comments on the temporary relief from the physical presence requirement. This included a specific request for comments on whether the relief from the physical presence requirement should be made permanent and, if so, what procedural safeguards should be in place.

© 2021 Faegre Drinker Biddle & Reath LLP. All Rights Reserved.National Law Review, Volume X, Number 365
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About this Author

Gregory J. Ossi ERISA Lawyer Drinker Biddle
Partner

Gregory J. Ossi advises his clients on ERISA litigation and labor law matters. He regularly counsels employers on a broad range of employee benefits matters, with an emphasis on multiemployer pension liability, including withdrawal liability issues and claims, as well as other health plan issues.

In addition to his work in the employee benefits area, Greg counsels and litigates disputes regarding union organizing, unfair labor practice charges, and labor issues arising from mergers, acquisitions and bankruptcy. Greg’s clients come largely from the energy production...

(202) 230-5393
Elizabeth Olson Betsy Olson Faegre Drinker, employee benefits law lawyer
Associate

Elizabeth “Betsy” A. Olson advises plan sponsors on the design and operation of qualified retirement plans and health and welfare plans to ensure compliance with ERISA and the Internal Revenue Code. Betsy has experience drafting and negotiating service provider contracts, preparing government filings, resolving pension and health plan claims, and correcting retirement plan qualification and operational failures under the IRS correction program. She also assists with Department of Labor audits, conducts employee benefit due diligence reviews, and drafts plan documents,...

(310) 203-4038
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