Compliance News | May 18, 2022

Relief from Physical Presence for Spousal Consent Extended

For the third time, the IRS has extended its relief from the “physical presence” requirement for any participant elections that a plan representative or a notary public must physically witness.

Until December 31, 2022, plans may continue to use video options and e-signatures to obtain spousal consent to participant waivers of benefit forms without the participant and spouse having to be present in person. This is a six-month extension.

A Couple Reviewing Document

Background

The IRS provided the original relief in Notice 2020-42 and extended it twice: in Notice 2021-3 and Notice 2021-40. The prior extension of the temporary relief is scheduled to end June 30, 2022.

The latest extension

The latest extension is in Notice 2022-27, which was issued on May 13, 2022.

Segal provided a full discussion of the substantive issues in its Notice 2021-40 description, which was issued on June 28, 2021.

Will the relief be made permanent?

The 2020 and 2021 notices asked for comments on whether the relief should be made permanent. The latest notice confirms that the Treasury Department and the IRS continue to consider that option in light of stakeholder comments they received.

If they decide to propose modification of the physical presence requirement, they’ll do that through the regulatory process. That would give stakeholders another chance to comment.

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This page is for informational purposes only and does not constitute legal, tax or investment advice. You are encouraged to discuss the issues raised here with your legal, tax and other advisors before determining how the issues apply to your specific situations.