Greetings, all.
Recordkeeper for employer-sponsored retirement plans here. I'm spinning my wheels, so I thought I'd consult the wisdom of the crowd. Here's my question: Would it be feasible under ERISA/the Code for service provider to design a process to allow qualified plan participants to elect distributions over the phone without completing a form of any kind? In other words, call center reps would orally guide participants through the election process, complete the online payment distribution form on behalf of the participant while they're on the call, and enter their choices in to our system. Totally verbal. It's the call center rep that's completing/submitting the election, and the participant is doing everything over the phone.
Assume, for the sake of argument, that (1) we could authenticate the caller (2) the call would be on a recorded line and would be scripted, (3) the plan document doesn't say anything specifically requiring a written election, and (4) we would have a separate process to obtain spousal consents or other documents that required a notarized signature.
Personally, I don't expect this would be allowed. I can think of about a half dozen reasons why this is a bad idea, (miscommunications, risk of offering "investment advice," etc.) However, the business folks are convinced that "other companies do this" and that somehow it would easier/more efficient than just helping the participants go to the website and complete the online form on their own. So if someone could tell me to find a definitive reason to shut this down it, I'd greatly appreciate it.
I have researched it and I cannot find much DOL/IRS guidance about it -- nothing forbidding it but nothing to suggest they would allow it either. The best guidance I can find seems to be 26 CFR 1.401(a)-21 - Rules relating to the use of an electronic medium to provide applicable notices and to make participant elections. Maybe there's an argument that the call itself would be an "electronic medium" for making elections? FWIW, it appears that the E-Sign act says that consumers could conceivably use an oral or voice signature to sign a document.
Has anyone had any experience with service providers allowing something like this? 'Please' and 'Thank You' for any insights you care to share!
