Electronic signing Plan Documents - RK pushback?

Is anyone else getting push back from any record keeper regarding e-signed plan documents? Nationwide is telling us that they have to wet signatures and are not accepting our e-signed versions. I know that other RKs send their documents out using e-signing so this has to just be Nationwide. Thanks for any feedback

A Revenue Procedure states: “The signature requirement [to adopt an IRS-preapproved document] may be satisfied by an electronic signature that reliably authenticates and verifies the adoption of the adoption agreement, or restatement, amendment, or modification thereof, by the employer.”

Rev. Proc. 2017–41 § 5.10, 2017-29 Internal Revenue Bulletin 92, 99 (July 17, 2017) https://www.irs.gov/pub/irs-irbs/irb17-29.pdf.

In recent years, I have not encountered a service provider that, if it asks for a plan sponsor’s signature, refused an electronic signature.

I have encountered service providers that refuse ink-on-paper, insisting that the only signature the service provider recognizes for its business purposes is an electronic signature, and one made using the service provider’s chosen software and method.

Pretty sure the OP is referring to distribution paperwork in this case and that's our experience with Nationwide. They require wet signatures and won't do any distribution steps online.

Bill Presson, thank you for spotting my miscue. Sorry if I misread the mention of “plan documents”.

If Kac1214 asks about how a service provider gets a plan’s administrator’s directions or instructions on whether and how to pay a plan’s distribution, services vary widely, and often are affected by a trust agreement’s terms, a service agreement’s terms, or both.

Except for spousal consent situations, and death distributions, the norm for us is e-signed distribution paperwork.  I'd be happy to talk to Nationwide clients about switching to us!  😁

Nationwide RK must be run by tree-killing climate change deniers!

One wonders if the service provider’s customers’ participants are charged an incremental fee if a participant elects paper, rather than electronic, account statements.

8 minutes ago, Peter Gulia said:

One wonders if the service provider’s customers’ participants are charged an incremental fee if a participant elects paper, rather than electronic, account statements.

Oh, we've thought about it - but implementation of different fees for paper vs. e-signed is probably more work and not worth it.  Participants are told though that e-sign is a faster process than paper - so if they want the money sooner, they should e-sign.

22 hours ago, Kac1214 said:

Is anyone else getting push back from any record keeper regarding e-signed plan documents? Nationwide is telling us that they have to wet signatures and are not accepting our e-signed versions. I know that other RKs send their documents out using e-signing so this has to just be Nationwide. Thanks for any feedback

I use a PDF signature which is an acutal signature and no one can tell I just pushed a button and signed.  

27 minutes ago, CuseFan said:

Nationwide RK must be run by tree-killing climate change deniers!

This makes me want to go print reems of paper. 

To reiterate, it is the Plan Document that they are asking us to provide a wet signature for.  @Peter Guliathank you for the cite!

MoJo, sorry if my observation was too subtle.

Perhaps it’s only my imagination, but I’ve observed that some retirement-services providers find ways to streamline a process when doing so aids the provider’s efficiency, but seem slower to streamline a process when it’s about customers’ convenience. Likewise, some providers find ways to get a customer to bear some expense for an inefficiency the customer could help avoid, but are less swift in improving a process when a customer bears the costs of an inefficiency.

My perceptions might be about some service providers less customer-friendly than the one you work for.

Kac1214, I’m glad my reading helps you.

Considering the IRS’s statement in its Revenue Procedure, a request for a non-electronic signature might be about a particular service provider’s business practice rather than meeting a tax law condition.

1 minute ago, Peter Gulia said:

MoJo, sorry if my observation was too subtle.

Perhaps it’s only my imagination, but I’ve observed that some retirement-services providers find ways to streamline a process when doing so aids the provider’s efficiency, but seem slower to streamline a process when it’s about customers’ convenience. Likewise, some providers find ways to get a customer to bear some expense for an inefficiency the customer could help avoid, but are less swift in improving a process when a customer bears the costs of an inefficiency.

My perceptions might be about some service providers less customer-friendly than the one you work for.

There are time when we "should" charge some clients for the inefficiencies they cause us - but we don't with a few exceptions.  We do for our group annuity product charge an additional fee for *not* using our plan documents, and a fee for submitting census info *not* though our automated portal.  But for requiring plan sponsor sign-off on all distributions (regardless of type), we don't (and that really slows the process down).  Lots of other examples.  Lots...

And BTW, for the cycle 3 restatement project - of the over 2200 plans we restated, all but 1 e-signed the plan documents and related stuff.  The "one" was out of the country, and just elected to sign a hard copy when he returned (and he was a late amender).

We have run into the situation where we receive a document that was electronically signed by an individual using their own software, but as a trustee and service provider we have no way of verifying the authenticity of the "electronic signature".  To us, it just looks like a stamp on a pdf.  When we send documents out for electronic signature, the process/software we use authenticates the signer.  Therefore, we know the person that electronically signed the document is the person we authenticated.   These are two very different situations.  Could this be the issue Nationwide is having with electronic signatures?

I am certainly not an expert with electronic signatures, but I cannot agree to accept a stamp on a pdf with no way to authenticate the electronic signature.  Certainly you could make the argument that we can't really authenticate a wet signature, but we can require notarization on important documents.