Qualified Plan Witness: Temporary Reprieve Extended

Qualified Plan Witness: Temporary Reprieve Extended

The IRS has issued Notice 2021-40, which extends the waiver of physical presence requirements for retirement plan elections, to June 30, 2022.

Election by Electronic Medium (with Physical Presence)

Normally, participants must make elections for retirement plans in the presence of a plan representative or a notary public. Federal regulations permit the use of electronic mediums for participant elections, so long as the following requirements of 26 C.F.R. §1.401(a)-21 are met:

  • The participant can effectively access the electronic medium;
  • The electronic medium is reasonably designed to preclude anyone other than the participant from making the election;
  • The individual can review, confirm, modify, or rescind the election before it becomes effective;
  • Within a reasonable time after the election, the participant receives confirmation of the election, either electronically or by paper document.
  • The remote notarization is executed via live audio-video technology.
  • The audio-video technology satisfies the requirements of 26 C.F.R. §1.401(a)-21 (listed above).
  • The state in which the notary is located permits remote electronic notarization.
  • The remote notarization is consistent with state law requirements applicable to the notary.

However, these regulations contemplate that the election, even if signed electronically, is made in the physical presence of a notary or plan representative.

Remote Election by Electronic Medium

Due to the social distancing precautions in place during the COVID-19 pandemic, the IRS waived the physical presence requirement from through December 31, 2020. The waiver was later extended to June 30, 2021. The current Notice extends the waiver for another year, to June 30, 2022.

Participants can make plan elections remotely, using live audio-video technologies, for (1) elections witnessed by a notary in a state that permits remote electronic notarization, and (2) elections witnessed by a plan representative, so long as the remote notarizations meet the following requirements as set forth in Notice 2021-03 Section III.A. and Section III.B.:

Participant elections witnessed remotely by a notary

  • The remote notarization is executed via live audio-video technology.
  • The audio-video technology satisfies the requirements of 26 C.F.R. §1.401(a)-21 (listed above).
  • The state in which the notary is located permits remote electronic notarization.
  • The remote notarization is consistent with state law requirements applicable to the notary.

Participant elections witnessed remotely by a plan representative

  • The remote notarization is executed via live audio-video technology.
  • The participant presents a valid photo ID during the audio-video conference.
    • Transmission of a photo ID before or after the audio-video conference is not acceptable.
  • The audio-video conference allows for direct interaction between the participant and plan representative.
    • Transmission of a video recording of the participant signing is not acceptable.
  • The participant transmits a legible copy of the signed document to the plan representative, by fax or electronic means, on the same date the document is signed.
  • The plan representative acknowledges witnessing the signature, and returns the signed document along with the representative’s acknowledgment, in satisfaction of the regulation notice requirements.

Adjusting to a Digital World

The Treasury Department and the IRS are also seeking public comment as to whether permanent guidance modifying the physical presence requirement should be issued. The deadline for comments on the following is September 30, 2021:

  • Costs or burdens associated with the physical presence requirement or with removal of the physical presence requirement
  • Evidence of any fraud, abuse, or spousal coercion associated with the physical presence requirement or with removal of the physical presence requirement
  • Whether in-person notarization will return as the COVID-19 pandemic abates
  • Safeguard procedures that should be established if the physical presence requirement is modified
  • Whether there should be different procedures for elections witnessed by notaries versus those witnessed by plan representatives.


The information contained in this Benefit Beat is not intended to be legal, accounting, or other professional advice, nor are these comments directed to specific situations. This information is provided as general guidance and may be affected by changes in law or regulation. This information is not intended to replace or substitute for accounting or other professional advice. You must consult your own attorney or tax advisor for assistance in specific situations. This information is provided as-is, with no warranties of any kind. CBIZ shall not be liable for any damages whatsoever in connection with its use and assumes no obligation to inform the reader of any changes in laws or other factors that could affect the information contained herein.

Qualified Plan Witness: Temporary Reprieve Extended https://www.cbiz.com/LinkClick.aspx?fileticket=KRglJwDG-_M%3d&portalid=0The waiver of physical presence requirements for retirement plan elections is extended to June 30, 2022.2021-07-01T19:00:00-05:00The waiver of physical presence requirements for retirementplan elections is extended to June 30, 2022.Regulatory, Compliance, & LegislativeEmployee Benefits ComplianceNo