Institute Comments on IRS Proposal Regarding Electronic Retirement Plan Communications

Washington, DC, October 12, 2005 - The Institute supports an Internal Revenue Service (IRS) proposal that would allow retirement plan administrators to take advantage of technology when communicating with customers.

Background
In 2000 the Electronic Signatures in Global and National Commerce Act (E-SIGN) was signed into law. E-SIGN gives legal recognition and effect to electronic signatures, contracts, and records; empowers the use of online contracts and provision of notices; and encourages federal agencies to accommodate electronic recordkeeping.

In July of this year, the IRS proposed regulations that provide guidance on the use of electronic media to provide certain notices to retirement plan participants and beneficiaries and to transmit participant elections relating to employee benefit arrangements.

ICI Position
In a recent comment letter, the Institute strongly supports the proposal's approach regarding the consumer consent requirement of E-SIGN. The proposal would provide an exemption to allow retirement plan administrators to continue using their existing procedures under the 2000 regulations. ICI also supports the proposal to allow electronic notarization of spousal consent if the individual's signature is witnessed in the physical presence of a plan representative or notary.

ICI notes in its letter that the proposals do not address IRAs, other than SEP IRAs and SIMPLE IRAs. The Institute requests that the IRS adopt consistent rules for all IRAs and clarify that the proposed regulations will not affect the current rules governing electronic IRA withholding notices and elections.

Related Links
Additional information about E-SIGN and electronic communication can be found on this website.