Many plan administrators and participants have struggled with how to satisfy certain qualified plan spousal consent rules while social distancing guidelines have been in effect. The US Internal Revenue Service (IRS) provided much-needed relief on that topic in Notice 2020-42, published on June 3, 2020 (the Notice).
By way of background, IRS regulations require that in the case of a participant election that is required to be witnessed by a plan representative or a notary public (such as a spouse’s consent to the waiver of a qualified joint and survivor annuity), the individual making the election must sign in the physical presence of a plan representative or a notary public. While the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) provides tax breaks for certain coronavirus-related distributions from both defined benefit and defined contribution plans, it did not liberalize the distribution requirements for defined benefit plans. The combination of social distancing and the continued physical presence requirement has proved to be a hindrance for married participants seeking distribution of pension plan benefits in a form other than a qualified joint and survivor annuity.
Continue reading on Mayer Brown’s Benefits & Compensation blog.
If you wish to receive periodic updates on this or other topics related to the pandemic, you can be added to our COVID-19 “Special Interest” mailing list by subscribing here. For any other legal questions related to this pandemic, please contact the Firm’s COVID-19 Core Response Team at FW-SIG-COVID-19-Core-Response-Team@mayerbrown.com.
The post US IRS Provides Temporary Relief from Physical Presence Requirement appeared first on COVID-19 Response Blog.