On June 3, 2020, in response to COVID-19 social distancing measures, the Internal Revenue Service (“IRS”) published Notice 2020-42 (“Notice”), relaxing the witness requirements of a plan representative or notary public for retirement plan elections. The temporary relief applies to all participant elections made between January 1, 2020 and December 31, 2020.

The Notice provides for remote electronic notarizations without the physical presence of a notary or plan representative if certain rules are satisfied. For a notary, state laws must permit remote electronic notarization. The notarization must occur via a live audio-video conference that would need to meet the applicable state’s requirements for remote notarization and satisfy the requirements of participant elections.

For elections that require a plan representative witness, the physical presence requirement is waived if they use live audio-video technology and satisfy the following:

  • The individual signing the participant election presents a valid photo ID to the plan representative during the conference (not before or after);
  • The live video allows for direct interaction between the individual and the plan representative;
  • The individual transmits by fax or electronic means a legible copy of the signed document directly to the plan representative on the same date it was signed;
  • After receiving the signed document, the plan representative acknowledges that the signature has been witnessed by the plan representative; and
  • The plan representative transmits the signed document, including the acknowledgement, back to the individual via a system that satisfies the electronic notice requirements.

The relief should provide much needed help and assistance with the facilitation of distributions and loans while promoting social distancing and public health.

If you have any questions about the waiver and how it may apply to you, please contact your Nyhart consultant for more information.