The IRS recently released proposed regulations (REG–114666–22) regarding the permanent alternative use of an electronic medium for those participant elections and spousal consents required for joint and survivor annuity plan distributions or loans. Current rules require in-person witnessing of spousal consents by a notary public or a plan representative.
The proposed regulations are a response to comments solicited by the IRS and Treasury throughout the COVID-19 pandemic. Due to social distancing requirements imposed during 2020, the IRS released a notice granting temporary relief from the physical presence requirement for spousal consents, followed by three temporary relief notices in 2021 and 2022. The proposed regulations would generally affect sponsors, administrators, and individuals entitled to benefits under certain qualified retirement plans.
The regulations are proposed to apply beginning on the date that is six months after publication of final regulations. Prior to the applicability date of the final regulations, taxpayers may rely on the rules set forth in the proposed regulations.
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