IRS Further Extends Temporary Relief from Physical Presence Requirement for Retirement Plan Consents

The IRS today issued Notice 2022-27, extending guidance released previously under Notice 2020-42 and extended by Notice 2021-03 and Notice 2021-40. The Notice provides additional 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. The new extension provides relief through December 31, 2022. This includes signatures of those making an election ordinarily needing 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.

Under this relief, live audio-video technologies may be used to facilitate remote notarization for distributions if meeting other election requirements and if this is consistent with state laws governing notarization. Also, 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.

The IRS has received comments from several stakeholders requesting permanent relief from the physical presence requirement and continues to consider whether to retain the physical presence requirement in its current form or to propose to modify the requirement. The IRS indicates that if modifications are proposed, the IRS will do so only through the formal rulemaking process, which will provide further opportunity for comment.