Saving for retirement is an important step to ensure financial well-being in the future. The decisions your clients make in regards to their retirement are some of the most important ones they will make in their lifetime. Today, retirement plan providers and their customers can take advantage of online notarization to help manage their retirement plans.
When it comes time to make changes to a retirement plan, either a withdrawal or to name a beneficiary, federal laws exist to protect married couples and guarantee certain spousal rights. The Retirement Equity Act of 1984 amended the Employee Retirement Income Security Act of 1974, adding protections for married couples and requiring spouses to obtain consent before making certain changes to their retirement plans.
As with so many of life's most important moments - from buying a home to building an estate plan - obtaining spousal consent requires witnessing by a notary public. Witnessing can also be performed by a plan representative but finding the time to meet with one can pose a challenge for some consumers. Meeting a notary in person can also be a headache, but that’s where online notarization can come in handy for your clients.
Thanks to the Internal Revenue Service (IRS), consumers have spent the last two years taking advantage of the benefits of online notarization and obtaining spousal consents from the comfort of their home. Online notarizations have been around since 2012, but recognizing that consumers needed a way to complete these forms during the COVID-19 pandemic, the IRS issued a notice allowing spousal consents to be completed in front of a notary online.
This relief has paved the way for modernization within the retirement plan industry - offering a more secure, safe, and cost-effective solution for consumers. A number of tech-savvy retirement plan providers are already offering online notarization to their customers, giving themselves a competitive edge in the market and streamlining what used to be an antiquated paper-based process for consumers.
When obtaining a spousal consent waiver, both spouses and retirement plan providers must be confident in the process and use a service that enables error-free transactions and takes certain steps to prevent fraud and address possible instances of spousal coercion.
Every transaction on the NotarizeSM platform begins with verifying a signer's identity, and online notarization gives the notary additional tools to strengthen the traditional ID check that occurs in person. Signers completing an online notarization through the Notarize platform are typically identified through:
Online notarization also creates a more robust record of each transaction than what is commonly captured in person, including:
These steps are central to online notarization and provide spouses and retirement plan providers peace of mind when completing transactions with Notarize.
While the IRS continues to extend this relief, it may not be around forever, so for your clients who are looking for a convenient and cost effective way to finalize their retirement plans, they should take advantage of this benefit today as documents executed under this relief are legally valid.
The IRS has an opportunity before the end of this year to take action to make this relief permanent and continue paving the way for a modern, secure, and safe future for the retirement plan industry that will benefit all your customers.
Notarize is already serving the retirement plan industry and is ready to serve your customers today.
If you're a Notarize customer and want to learn more about online notarization for spousal consents, reach out to email@example.com.
If you are a retirement plan provider looking for ways to digitize your workflows, click here.
NOTE: The extension of temporary relief from the physical presence requirement for the execution of spousal consent waivers, issued by and through IRS Notice 2022-27, is available through December 31, 2022.