The Trump administration is relaxing rules that govern emergency access to work-sponsored retirement accounts as part of its virus-related relief efforts.
Employees will no longer have to give in-person consent or sign paperwork in the presence of a notary public or plan representative as required by current law. The changes allow them to either e-sign documents in states allowing remote notarization or indicate their preferences on teleconference calls, with certain conditions.
The change is needed to “facilitate the payment of coronavirus-related distributions and plan loans” to cash-strapped workers quarantining at home during the global pandemic, IRS officials said. Regulators want people who need emergency loans from their retirement plans to easily access them.
The IRS issued guidance Wednesday authorizing temporary relief for benefit elections that are typically conducted in front of an official witness (Notice 2020-42).
The guidance requires that: plan participants have access to the technology needed to make changes electronically; have “a reasonable opportunity” to review, confirm, modify, or cancel the change before it takes effect; and receive confirmation, either by hard copy or email, once the change has gone through. The guidance also requires that safeguards block would-be impostors from participating in the process.
The post-change confirmation notice was one of the recommendations members of the Pension Rights Center made months ago in an effort to preserve spousal consent protections governing retirement assets.
The remote consent guidance is effective through Dec. 31.
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