Industry groups raised questions about and expressed support for an IRS proposal that would allow retirement plan participants to notarize certain procedures electronically, rather than in-person. This would make permanent rules introduced during the pandemic.
The IRS proposal was published in December 2022, and today was the last day to submit comments.
The AARP has expressed concern, however, about spousal consent. They note that when a pension plan participant dies, their surviving spouse might be eligible for a qualified lifetime survivor benefit. Opting for this benefit can reduce the regular benefits the participant receives, so some participants may opt out. This opting out requires the spouse’s consent, which must be witnessed by a notary and a plan representative.
Given the high stakes of waiving such a benefit, the AARP believes this process should “require maximum safeguards against misunderstanding, outright deception, coercion, or other improper behavior,” which would be better served in person, rather than remotely.
The U.S. Chamber of Commerce expressed support for the proposal, but also stated concern about one element which would require plans to record and retain witnessings that require a plan representative. Specifically, they are concerned this requirement could force plans to violate state recording laws.
Likewise, the ERISA Industry Committee expressed the same support and concern as the Chamber of Commerce. They said, “We do have some concern that this new recording requirement will raise complications for plan representatives under state laws. For example, states have varying laws regarding whether one or both parties are required to consent to recordings.”