Spousal Consent Rules

| June 15, 2020

Certain (not all) retirement plans require a spouse to consent in writing to a plan distribution and/or loan. In ‘normal’ times this meant the spouse taking the paperwork to their local notary, or their bank if those services are offered, signing the document and having the signature witnessed and notarized. Some plans also allow a plan representative to witness a spousal signature.

With so many participants under a stay at home order, and others wanting to maintain social distancing, this has presented a problem. Many participants who ordinarily would not be taking distributions and loans need to do so due to reduced hours and company lay-offs.

The Treasury Department has issued Notice 2020-42 on June 3, 2020, and this provides temporary relief for the physical presence requirement. This relief is retroactive to January 1 and continues for the rest of the calendar year.

If your plan requires spousal consent, your spouse must still utilize ‘remote notarization’ (if allowed by your state*). This would entail a live audio/video conference during which the spouse presents a valid photo ID. The live conference must allow for the plan representative to interact and cannot be pre-recorded. The document then may be sent via fax or electronically for processing.

As always, contact us at 610-251-0670 with any questions on your retirement plan!

*New York state’s governor signed a temporary executive order on March 19, 2020 permitting remote notarization, and this temporary order has been extended until June 6, 2020. The state of Pennsylvania allows remote notarization effective April 20, 2020, and it will remain in effect during COVID-19 and for 60 days following the expiration of the disaster emergency. New Jersey enacted a temporary measure on April 14, 2020, which is in effect for the duration of the COVID-19 health emergency. Please check with your local area for remote notarization information.