Compliance March 30, 2023

AARP, US Chamber Comment on IRS Proposal on Remote Notarization

Thursday was the final day to submit comments on the December 2022 IRS proposal to allow remote notarization for many retirement plan changes and actions.

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Industry groups raised questions about and expressed support for an IRS proposal that would allow retirement plan participants to notarize certain procedures electronically, rather than in-person. This would make permanent rules introduced during the pandemic.

The IRS proposal was published in December 2022, and today was the last day to submit comments.

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The AARP has expressed concern, however, about spousal consent. They note that when a pension plan participant dies, their surviving spouse might be eligible for a qualified lifetime survivor benefit. Opting for this benefit can reduce the regular benefits the participant receives, so some participants may opt out. This opting out requires the spouse’s consent, which must be witnessed by a notary and a plan representative.

Given the high stakes of waiving such a benefit, the AARP believes this process should “require maximum safeguards against misunderstanding, outright deception, coercion, or other improper behavior,” which would be better served in person, rather than remotely.

The U.S. Chamber of Commerce expressed support for the proposal, but also stated concern about one element which would require plans to record and retain witnessings that require a plan representative. Specifically, they are concerned this requirement could force plans to violate state recording laws.

Likewise, the ERISA Industry Committee expressed the same support and concern as the Chamber of Commerce. They said, “We do have some concern that this new recording requirement will raise complications for plan representatives under state laws. For example, states have varying laws regarding whether one or both parties are required to consent to recordings.”

Deals & People March 30, 2023

T. Rowe Price to Acquire Retirement Income Fintech Retiree, Inc.

Rowe Price plans to incorporate the retirement income planning software into its retirement offerings for advisers, plan sponsors, and participants.

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T. Rowe Price announced its acquisition of Retiree, Inc., a fintech firm that offers retirement income planning software. Retiree, Inc.’s software will complement and expand on T. Rowe Price’s existing retirement capabilities, creating a more comprehensive suite of retirement income solutions.

“Our intent is to build future offers integrating Retiree Inc. technology across direct investor, plan participant and sponsor, financial and retirement advisor, and DCIO client audiences,” said Phil Korenman, head of Individual Investors business at T. Rowe Price, in an email. “Retiree, Inc. has developed innovative retirement income technology, and T. Rowe Price has the ability to positively influence the retirement outcomes of millions of households through our diverse distribution model. We will be sure to communicate more about our vision for future solutions over time.”
The firms announced the acquisition as retirement solutions providers seek to solve for sustainable decumulation of savings in retirement. In January, OneAmerica Financial Partners Inc. announced in January a partnership with PensionPlus, a personalized retirement withdrawal strategy.  

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Retiree, Inc.’s tax-aware income planning software offers clients personalized income strategies. The software draws from a household’s accounts with different tax treatments, including Roth conversion strategies. Its goal is to increase the lifetime value of total after-tax income and bequest value. Through Retiree Inc.’s technology, clients can make more informed decisions and optimize their retirement resources.

“The software will be an important part of our strategy to build personalized retirement income solutions and services for our clients,” said Dee Sawyer, head of retirement plan services and U.S. intermediaries at T. Rowe Price, in a statement. “Retiree, Inc. and T. Rowe Price share the passion and understanding that increasing the longevity of a retirement income strategy is critical to improving retirement outcomes for Americans.”

The terms of the deal were not disclosed and are subject to satisfaction of certain closing conditions. T. Rowe Price expect the transaction to close in the second quarter of 2023.

“We are thrilled to join T. Rowe Price to harness the power of our technology solutions across their robust distribution channels. T. Rowe Price shares our commitment of helping more investors extend their retirement resources and be more confident in retirement,” said William Meyer, Retiree, Inc.’s CEO, in a statement.

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