2FA for P&A Participants
The Coronavirus Aid, Relief and Economic Security Act, or CARES Act, contains important changes to retirement plan vehicles, including changes to defined contribution and defined benefit retirement plans. Americans can expect the following changes to retirement plans.
The CARES Act identifies a “coronavirus-related distribution” as the following:
The administrator of the retirement plan can use the employee’s certification that the employee satisfies the conditions of needing a coronavirus-related distribution.
Generally, a loan from a qualified plan cannot exceed the lesser of $50,000 or 50% of the participant’s vested account balance. Under the CARES Act, a qualified individual may take a loan up to the lesser of $100,000 or 100% of the participant’s vested account balance, beginning on March 27, 2020, through a 180-day period. Qualified individuals are the same individuals listed above who are eligible for the 10% penalty waiver. If a plan loan is outstanding on or after March 27, 2020 through December 31, 2020, the due date is extended for one year. Subsequent payments will reflect the delay in the due date and any interest accrued during that time.
Required minimum distributions (RMDs) for the 2020 calendar year are waived for defined contribution plans including 401(k), 403(b) and 457(b) plans. Amounts withdrawn in 2020 that, without this waiver would not have been eligible to rollover, can be rolled over into the next year. The waiver applies to:
Plan sponsors are to adopt plan amendments by December 31, 2022 for plans that are on a typical calendar plan year (January 1 – December 31). For plans that are on a different calendar, plan sponsors have until the last day of the plan year that begins in 2022 to complete plan amendments. Government plans are not required to complete any amendments until the last day of the first plan year beginning on or after January 1, 2024. If the Secretary of the Treasury extends any deadlines, we will let you know.
If you have any questions, please contact P&A Group’s Retirement Plan division at (800) 688-2611. Click here to learn about healthcare updates under the CARES Act.