PLANADVISER - January/February 2021 - 6

compliance news //
tently been named one of the most
bipartisan senators. I am proud of that,
and I will continue to reach out to my
colleagues on both sides of the aisle to
find common ground. "
Relief From Physical Presence
Requirement Continues
The physical presence requirement for
spousal consents and participant elections
under qualified retirement plans
will remain lifted through June 30.
The IRS, in Notice 2021-03, has
extended the temporary relief it had
provided from the physical presence
requirement
for
spousal
consents
under qualified retirement plans from
this January 1, for six months, through
June 30, due to the ongoing crisis
created by the COVID-19 pandemic. In
addition, the requirement that participant
elections be witnessed by a plan
representative or notary public will
also be lifted through that time.
As a way of background, the IRS
notes that last March 13, President
Donald Trump determined that
the
COVID-19 pandemic was of sufficient
severity and magnitude to warrant
an emergency determination under
the Robert T. Stafford Disaster Relief
and Emergency Assistance Act. Rather
than physical presence, retirement
plan sponsors may use electronic
media to send notices to recipients or
permit participants to make elections
with respect to their retirement plan,
the notice says.
However, the individual must be
able to access the electronic medium,
which must be reasonably designed to
preclude anyone other than the appropriate
person from making the election.
The electronic system must also
" provide the individual making the
participant election with a reasonable
opportunity to review, confirm, modify
or rescind the terms of the election
before it becomes effective, and the
individual making the participant election,
within a reasonable time, must
receive confirmation of the election
through either a written paper document
or an electronic medium that
satisfied the applicable notice requirements, "
the notice says.
Likewise, a participant's consent
to a distribution may be provided
through the use of electronic media,
the notice says.
It also clarifies that " remote electronic
notarizations differ from
electronic notarizations in that [the
former] generally are conducted [from
one location to another] over the
internet using digital tools and live
audio-video technologies, whereas
[the latter] may be signed electronically
but still require that certain
The IRS, in Notice
2021-03, has
extended the
temporary relief
it had provided
from the physical
presence
requirement for
spousal consents
under qualified
retirement plans ...
signatures be witnessed in the physical
presence of a notary public or
plan representative. "
The IRS first passed the relief for
participant elections last June, in
response to the COVID-19 pandemic
and related social distancing guidelines.
The agency said, at that time, that
the temporary relief, which covered all
of last year, was intended to facilitate
the payment of coronavirus-related
distributions (CRDs) and plan loans,
as permitted by the Coronavirus Aid,
Relief and Economic Security (CARES)
Act. It also applied to any participant
election requiring the signature of
an individual to be witnessed in the
physical presence of a plan representative
or notary.
The Treasury Department and the
IRS welcome comments with respect
to the extension of these measures
through June 30.
Vail Resorts Wins Dismissal
A new ruling out of the U.S. District
Court for the District of Colorado
grants the dismissal motion filed by
the defense in an Employee Retirement
Income Security Act (ERISA)
lawsuit known as Kurtz v. Vail Corp. The
underlying lawsuit accuses Vail Corp.
of permitting excessive fees in the
Vail Resorts 401(k) Retirement Plan.
According to the complaint, for at least
18 of the 27 mutual fund share classes
available within the plan, the same
issuer offered a different share class
from the one selected by the plan that
charged lower fees and consistently
achieved higher returns. The plaintiff
says the plan " inexplicably failed to
select these lower-fee-charging and
better-return-producing share classes. "
The complaint also alleges that the
administrative fees charged to Vail
plan participants are greater than over
90% of comparator fees when calculated
on a cost-per-participant basis,
or as a percent of total assets, without
the provider delivering commensurate
value. Finally, the complaint suggests
the defense imprudently failed to
provide a sufficient number of passively
managed investment options.
In ruling against these allegations
and granting Vail's dismissal
motion,
the District Court
commerce
technology
echoed
some of the same points made in a
recent dismissal ruling filed in favor
of
company
Salesforce. Central to the dismissal is
the consideration of several issues of
standing. As the text of the Vail ruling
recounts, the defendants argued that
the lead plaintiff only invested in five
of the many plan options that she
challenged. As a result, the defendants
contended, the lead plaintiff had no
standing to challenge the remaining
options, because she had not alleged a
" concrete and particularized " injury in
fact. In response, the ruling recounts,
the plaintiff asserted that she did not
bring
independent
claims
for
each
of the challenged funds, but instead
brought a single claim for mismanagement
of the entire plan.
The suit was dismissed with prejudice,
which means it may not be
brought back to court. -PA
6 | planadviser.com January-February 2021
http://www.planadviser.com
PLANADVISER - January/February 2021

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