Oh Won’t You Stay…A Little Bit Longer…Because There’s No Need to Sign Your Distribution Form in Person

Holland & Hart - The Benefits Dial

Holland & Hart - The Benefits Dial

In June 2020, the IRS issued Notice 2020-42 providing temporary relief from the physical presence requirement for certain participant distribution and beneficiary designation elections required to be witnessed by a notary public or plan representative.  This temporary relief was scheduled to expire June 30, 2021, and now has again been extended by the IRS.

As the COVID-19 pandemic continues, the IRS issued Notice 2021-40, again extending the temporary relief through the 12-month period ending June 30, 2022, as long as the prior requirements are met.  See our January 25, 2021 blog posting for a summary of the requirements.

In response to comments received from its previous guidance, the IRS is again requesting comments on whether permanent guidance modifying the physical presence requirement should be issued.  Specifically, the IRS is requesting comments regarding:

  • how the temporary relief from the physical presence requirement has affected costs and burdens for plans, participants and spouses and whether there are costs and burdens associated with the physical presence requirement that support modifying the requirement on a permanent basis;
  • whether there is evidence that the temporary removal of the physical presence requirement has resulted in fraud or spousal coercion and if the permanent removal of the physical presence requirement would increase the incidents of fraud or coercion;
  • how participant elections are being, or are expected to be, witnessed as the COVID-19 pandemic subsides;
  • what procedures should be implemented to provide the same safeguards for participant elections if the physical presence requirement is permanently removed; and
  • if procedures for witnessing by plan representatives should be different than those for witnessing notary publics.

Many plan sponsors have been hoping this relief will be made permanent.  If you haven’t had a chance to weigh in, comments are due to the IRS by September 30, 2021.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

© Holland & Hart - The Benefits Dial | Attorney Advertising

Written by:

Holland & Hart - The Benefits Dial

Holland & Hart - The Benefits Dial on:

Reporters on Deadline

"My best business intelligence, in one easy email…"

Your first step to building a free, personalized, morning email brief covering pertinent authors and topics on JD Supra:
*By using the service, you signify your acceptance of JD Supra's Privacy Policy.
Custom Email Digest
- hide
- hide

This website uses cookies to improve user experience, track anonymous site usage, store authorization tokens and permit sharing on social media networks. By continuing to browse this website you accept the use of cookies. Click here to read more about how we use cookies.