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COLLECTED WISDOM™ on the Coronavirus Pandemic and 401k Plans

This page gathers relevant information and coverage related to the coronavirus pandemic and 401k plans.

This archive contains not only the most current material on the topic, but also older items that are still relevant, provide background, perspective or are germane to the topic.

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Impact of the CARES Act on Retirement Plans and Action Items for Plan Sponsors

This special alert addresses the relevant CARES Act provisions affecting retirement plans, which plan sponsors should be aware of immediately, and suggest practical steps that plan sponsors should consider now in light of the passage of the CARES Act.

Source: Truckerhuss.com, April 2020

COVID-19 Relief: Changing Employer Retirement Plan Contributions

As employers face the current state of the economy with COVID-19, some plan sponsors are seeking to reduce or temporarily suspend employer contributions. Here is a brief overview of the options available to employers. Plan sponsors should review their plan documents and discuss the reduction or suspension with their retirement plan service providers and/or ERISA attorneys.

Source: Tri-ad.com, April 2020

Special Distributions From Puerto Rico Retirement Plans and IRAs are Extended to COVID-19 Victims

The PR Treasury Department issued on March 29, 2020, Internal Revenue Circular Letter No. 20-23 providing that "Eligible Expenses" under the recently issued Internal Revenue Circular Letter No. 20-09 will also consist of damages, losses (including loss of income), and extraordinary expenses incurred as a result of the COVID-19 emergency.

Source: Mcvpr.com, April 2020

Retirement Plan Provisions in the CARES Act

The CARES Act was signed into law on March 27, 2020. It is a mammoth bill of over 880 pages and contains many employee benefit-related items. This post deals with the qualified retirement plan provisions in the Act.

Source: Kushnerco.com, April 2020

COVID-19: Impact on U.S. Retirement Plans

The COVID-19 pandemic is a once-in-a-generation global emergency. Retirement programs are not immune to the disruption it has caused. At this time it is critical that these programs continue to function and fulfill their important role in society as many will depend on them to provide much needed financial security. This 10-page reference document addresses the potential disruptions to employer-sponsored retirement programs and how plan fiduciaries can mitigate them.

Source: Buck.com, April 2020

New COVID-19 Rules for Hardship Distributions

If an affected taxpayer makes a qualified COVID-19 withdrawal, the funds are not limited to COVID-19 related expenses such as medical bills. They can be used for any purpose, such as food, rent utilities, paying off credit cards or helping another family member or any other purpose for that matter. The CARES Act is fairly broad as to who qualifies for a COVID-19 related hardship distribution.

Source: Belfint.com, April 2020

COVID-19 Checklist for Plan Sponsors

As COVID-19 upends business operations, it is changing 401k plan management. Plan sponsors face new responsibilities and urgent situations. This is a checklist of tasks and issues for consideration, with recommendations of service providers whose assistance employers may seek.

Source: Alliant401k.com, April 2020

401k Matching Contributions at High Risk Due to Coronavirus Crisis

With mass layoffs, furloughs and dramatic drops in business revenue infecting sectors across many industries as the U.S. battles the COVID-19 pandemic, it's not particularly surprising that companies are looking at suspending their 401k matching contributions, or even terminating plans altogether as they struggle to stay in business.

Source: 401kspecialistmag.com, April 2020

Plan Sponsors Facing Difficult Decisions During Coronavirus Pandemic

Employers are facing difficult decisions as a result of the economic impact of the coronavirus outbreak, including decisions about their retirement plans. Stopping employer matching contributions, laying off employees, adjusting DB plan contributions; plan sponsors need to understand the effects of each decision.

Source: Plansponsor.com, April 2020

Reducing or Suspending Employer Retirement Plan Contributions Due to COVID-19

The COVID-19 pandemic raises many concerns for employers who sponsor qualified retirement plans, particularly employers who experience economic hardship. This article addresses the most common questions asked by employers who want to reduce or suspend retirement plan contributions.

Source: Icemiller.com, April 2020

The Coronavirus Crisis: What Plan Sponsors Should Do

The Coronavirus pandemic is disrupting everyone's personal and financial lives. While our health, and that of our families and friends, is paramount, we realize that the sudden and large investment losses in the 401k plans that you sponsor -- and act as fiduciaries for -- present issues more challenging than those typically encountered by employers and plan committees. This article suggests steps that you can take as fiduciaries to address those challenges. The article also applies to advisors because it addresses questions they may get from plan sponsors.

Source: Fredreish.com, April 2020

401k Plans in the Age of COVID-19: Hardship Withdrawals, Loans, Contributions, and Other Issues

Employee benefit plans, including 401k retirement plans, present unique issues. This article explores hardship distributions, plan loans, contributions, and other issues in association with the present COVID-19 crisis.

Source: Compliancedashboard.net, April 2020

CARES Act FAQ

The CARES Act includes several key provisions that will positively impact retirement plan participants and plan sponsors. The ARA has prepared this FAQs to highlight some of the most salient relief measures.

Source: Asppa-net.org, April 2020

Retirement Plan Provisions of CARES Act

The third COVID-19 stimulus package has provisions regarding retirement plans, including expanded and penalty-free withdrawal rights, expanded loan rights, extended rights to repay loans and withdrawals, and a deferral of mandatory distributions.

Source: Wagnerlawgroup.com, March 2020

CARES Act: Retirement Plan Provisions for Employers and Plan Administrators

This legislation contains several important provisions for employers and plan administrators regarding their retirement plans. The article discusses special withdrawal, loan, and required minimum distribution provisions in the CARES Act.

Source: Pbwt.com, March 2020

Accessing Retirement Plan Funds Under CARES Act and Existing Law

This publication provides an overview of the frequently asked questions for plan sponsors who want to provide employees with increased access to their retirement funds in light of personal financial challenges caused by the coronavirus outbreak. It addresses options to reduce or suspend elective deferrals and liberalize distribution and loan options to plan participants under existing law as well as under the CARES Act. It is particularly important for plan sponsors to understand how the new distribution provisions under the CARES Act impact their retirement plans.

Source: Icemiller.com, March 2020

The CARES Act and Its Impact on Retirement Plans

The CARES Act is a very extensive piece of legislation that is meant to provide emergency assistance to large and small distressed businesses, to stabilize the U.S. economy that has been hammered by this pandemic. This bill covers a lot more of the highly publicized economy provisions. This article specifically focuses on the provisions that directly impact tax-qualified retirement plans.

Source: Findley.com, March 2020

CARES Act: Employee Benefits Implications

Congress has passed the CARES Act to help combat the impacts of COVID-19. This article is intended as a high-level overview of the employee benefit provisions of the Act. There are ambiguities and clarification on some of the details is still needed.

Source: Clarkhill.com, March 2020

Highlights of Employee Benefits Provisions in the CARES Act

The President signed into law the Coronavirus Aid, Relief, and Economic Security Act or "CARES Act." The CARES Act is primarily a stimulus package that addresses the current coronavirus crisis, but it includes several provisions relating to employee benefit plans. This article reviews those employee benefits provisions.

Source: Bradley.com, March 2020

Trump Signs Coronavirus Stimulus Legislation With Retirement Relief Into Law

President Trump signed into law the sweeping $2 trillion stimulus bill that includes retirement relief provisions. the retirement-based provisions stick closely to what was initially proposed by Senate Majority Leader Mitch McConnell, including provisions to ease retirement plan hardship and loan rules to free up funds for individuals impacted by the pandemic and to provide relief from the required minimum distribution rules.

Source: Bradley.com, March 2020

Suspending or Reducing Safe Harbor Contributions in DC Retirement Plans

Many companies have to reduce their expenses and improve cash flow in reaction to the current volatility in the economy due to Covid-19. A number plan sponsors are asking if it is permissible to suspend or reduce required safe-harbor contributions during the plan year. An employer can reduce or suspend its safe harbor contributions during a plan year, but only if certain conditions are met.

Source: Wagnerlawgroup.com, March 2020

Helping Plans and Participants Respond to the COVID-19 Challenge

The spread of the Coroinavirus, and the measures to keep it under control, have caused dramatic changes in the financial environment underpinning retirement plans. A recent Plan Sponsor Council of America webinar discussed what it means for plans and participants.

Source: Napa-net.org, March 2020

Senate Approves Coronavirus Stimulus With Retirement Relief

The Senate unanimously approved a sweeping $2 trillion stimulus bill, including retirement relief provisions. As for those retirement-based provisions, the final bill sticks closely to what was initially proposed by Senate Majority Leader Mitch McConnell, including provisions to ease retirement plan hardship and loan rules to free up funds for individuals impacted by the pandemic and to provide relief from the required minimum distribution rules.

Source: Napa-net.org, March 2020

Important Considerations for 401k Plan Sponsors Impacted by COVID-19

As guidance continues to be released and legislation continues to be proposed and enacted into law, it is important for employers who sponsor 401k plans or other tax-qualified defined contribution plans to understand critical stress points and administrative issues that will likely arise as sponsors and participants face these uncertain times.

Source: Mmmlaw.com, March 2020

Companies Cut 401k Contributions Amid COVID-19

Many businesses are doing whatever they can to stay afloat, retirement plan advisers said. Many employers have started cutting back on 401k benefits amid the COVID-19 outbreak, in many cases stopping their contributions to employees' accounts to reduce costs.

Source: Investmentnews.com (registration may be required), March 2020

How DC Plans Should Prepare for Missed Loan Repayments

The significant economic tremors, including income insecurity and job reductions, stemming from the coronavirus pandemic may lead to increased loan defaults and impact long-term retirement readiness. Plan sponsors have some ability to facilitate repayments and minimize defaults for participants who are unable to make loan repayments.

Source: Callan.com, March 2020

COVID-19: Mid-Year Changes to 401k Plans

Employers looking to reduce operating costs in the short term in response to the disruption caused by the COVID-19 pandemic may seek to reduce or suspend their matching or nonelective contributions in their 401k plan. This article summarizes the key issues facing employers in deciding to suspend or reduce safe-harbor contributions.

Source: Benefitsbclp.com, March 2020

401k and 403b Hardship Distributions and COVID-19 Declared Disaster Areas

The Federal Emergency Management Agency has declared several disaster areas around the United States as a result of the spread of the coronavirus. Under final regulations issued in 2019, a federal disaster declaration has become one of the safe harbor reasons that qualifies a 401k or 403b plan participant for a hardship distribution, so it appears that plan participants may now be able to take a hardship withdrawal if they are laid off, put on an unpaid leave of absence or incur other expenses and losses on account of COVID-19.

Source: Beneficiallyyours.com, March 2020

COVID-19 Employee Benefits FAQs for Employers: Focus on Retirement Plans

This FAQ answers commonly asked plan administration questions, summarize an employer's continued fiduciary duties, and highlight plan amendments that may help ease the burden of the COVID-19 emergency on employees and/or employers.

Source: Troutman.com, March 2020

Retirees and Investors Watch for Congressional Coronavirus Action

The events of recent days relating to the novel coronavirus pandemic's spread in the United States and around the world have very quickly changed the focus to securing emergency relief for retirement plan investors and employers. To this end, 25 organizations are calling for immediate congressional action to provide relief to employers that offer retirement plans, plan participants and retirees in response to the current crisis created by the outbreak of COVID-19.

Source: Planadviser.com, March 2020

How Can a 401k Plan Sponsor Continue to Contribute to a Quarantined Employee's 401k Account?

Depending on the state a 401k plan sponsor is operating in, they may be finding their employees can no longer work on-site. This is done with safety in mind. But, depending on the circumstances, it may harm employees' ability to retire in comfort. This is especially true if the employee is no longer eligible for a matching contribution from the company. While the situation is too recent to get good data, anecdotal evidence suggests at least some plan sponsors are trying their best to keep their employees' best interests in mind.

Source: Fiduciarynews.com, March 2020

Layoffs, Reductions in Force, and the 401k Plan

Many business owners, employment law counsel, and benefit advisors are grappling with reductions in force/layoffs due to the unprecedented business and economic impact of COVID-19. This article briefly reviews a retirement plan compliance issue that these staff reductions can trigger. The rule applies to all qualified retirement plans, not just 401k plans.

Source: Eforerisa.wordpress.com, March 2020

401k Withdrawal Provisions Contained in Coronavirus Bill

In a section titled "Tax-Favored Withdrawals from Retirement Plans" the Coronavirus, Aid, Relief, and Economic Security (CARES) Act establishes special rules for certain tax-favored withdrawals from retirement plans. More specifically, it spells out when and how the 10% early withdrawal penalty can be avoided under Section 72(t) of the Internal Revenue Code.

Source: 401kspecialistmag.com, March 2020

Monitoring Retirement Plan Investments and Participant Communications in the Time of COVID-19

One area where plan fiduciaries are seeking guidance concerns oversight of defined contribution plan investment options and any additional actions that they can take now to monitoring such investments and providing communications to participants. In light of these concerns, plan sponsors and fiduciaries may wish to consider taking action on the items reviewed in this article.

Source: Workforcebulletin.com, March 2020

401k Hardship Withdrawals Can Help With Employees' Coronavirus-Related Costs

One way that employers can assist employees faced with coronavirus-related costs and expenses today (no Congressional action or immediate employer action required) is that employers can permit employees to take hardship withdrawals from their 401k plan accounts to meet coronavirus-related expenses. The employee will still need to meet the requirement that the distribution is necessary to satisfy the financial need. There are two possible mechanisms for permitting these hardship withdrawals.

Source: Stevenslee.com, March 2020

Senate Bill Expands Retirement Plan Access for Coronavirus Impact

Senate Majority Leader Mitch McConnell, on behalf of the Senate Republican caucus, introduced the Coronavirus, Aid, Relief, and Economic Security (CARES) Act, which includes key provisions advocated by the American Retirement Association affecting hardship distributions and plan loans.

Source: Napa-net.org, March 2020

Coronavirus Check-Up for Retirement Plans

As 401k plans and other retirement benefits represent significant assets for most employees and retirees, they may look to their retirement plans for assistance. This article looks at some considerations for retirement plan sponsors and fiduciaries as they navigate the process of reacting to the changes in the business environment and helping participants.

Source: Groom.com, March 2020

Emerging Coronavirus Issues for Employer Benefit Plans

As employers prepare their workforces for issues related to COVID-19, they should also take steps to ensure that their benefit plans are prepared. The impact of the virus will put a financial and logistical strain on many employees, and they will likely look to employers for guidance on several issues related to benefit plans. This article discusses the following important topics for employers to consider during this time.

Source: Eversheds-sutherland.com, March 2020

Employer Actions for 401k Plans Sickened by Coronavirus

The realities of the Coronavirus pandemic have quickly and dramatically changed the way we work, shop, seek health care, and interact with each other. The employer sponsors of 401k plans and any employer-based fiduciary investment committees should consider taking steps now in response to these developments.

Source: Dickinson-wright.com, March 2020

Suspending Employer 401k Contributions in Response to COVID-19

Businesses adversely affected by COVID-19 may be considering terminating their 401k plans to end their contribution obligations. However, a more measured response would be to temporarily suspend or reduce employer contributions. A temporary suspension does not require full vesting of all employees as a complete termination or discontinuance of contributions would require. How a suspension or reduction of employer contributions works depends on the type of 401k plan currently in effect.

Source: Cohenbuckmann.com, March 2020

401k Plans During the Covid-19 Pandemic

Now that it has become clear that the Covid-19 health crisis will result in significant economic disruption, including furloughs and job losses, employers should expect to confront challenges related to their 401k plans. Here are several of the planning and operational concerns that are on the horizon.

Source: Blankrome.com, March 2020

Retirement Plan Fiduciary Action During Events Like COVID-19

As many people shift to work-at-home arrangements and businesses lay off workers due to the uncertainty of the business world in the next few months, it is imperative that retirement plan fiduciaries not allow these conditions to postpone their oversight of retirement plans. Several issues that bear watching are reviewed here.

Source: Barran.com, March 2020

401ks Service Providers and the Coronavirus

Serious times make clear the value of 401k providers that offer the highest level of service. Amidst the coronavirus, market volatility created by investors reacting to the now-named pandemic reminds plan sponsors just how important their plan's advisors are. Consult this list in speaking with current and future advisors to obtain the highest level of advisory service.

Source: Alliant401k.com, March 2020

401ks and COVID-19: What Consumers are Hearing from Financial Experts

The mainstream media has been filled with a variety of financial experts doling out advice to a population generally terrified about what the coronavirus pandemic is doing to their 401k. You'll find some common themes among this quick roundup of comments in the past few days.

Source: 401kspecialistmag.com, March 2020

Equity Funds Crushed in Coronavirus Safety Stampede

Like everything else, mutual fund flows are negatively impacted by the coronavirus (or at least the reaction to it). Overall (and unsurprisingly) investors backed away from U.S. equity funds and turned to perceived safe havens like bonds and cash, after the S&P 500 turned down sharply amid fears of COVID-19 gripping the markets.

Source: 401kspecialistmag.com, March 2020

Coronavirus Concerns for 401k Plan Sponsors

The coronavirus outbreak is starting to become another financial challenge for all of us in the 401k industry and all of us with a 401k balance. As a 401k plan sponsor, the bad news might be worrying you and this article is all about why you shouldn't panic and what you should be considering if the markets remain volatile.

Source: Jdsupra.com, March 2020

COVID-19 Quarantine Question: How Should 401k Plan Sponsors Communicate to Employees Working From Home?

It's starting to happen. City by city, county by county, state by state, businesses are deciding to tell their employees to work from home. One of the disadvantages, however, is the lack of ease of communicating that exists when working proximity is reduced. You simply can't shut over the cubicle to get your coworkers attention. For retirement plan sponsors, communication is not merely a form of social interaction, it's a fiduciary duty. How does the change in work location impact this duty? And what can 401k plan sponsors do about it?

Source: Fiduciarynews.com, March 2020

Coronavirus Adds to Employer To-Do List, Check Employee Benefits

An employer may wish to consult employee benefits counsel to determine whether an employee who has contracted Covid-19 or who is subject to quarantine could qualify for a hardship distribution under its 401k plan.

Source: Bloomberglaw.com, March 2020

How to Protect Your 401k From the Coronavirus

Financial concerns stemming from the coronavirus outbreak have rippled through the global economy. The coronavirus has had an undeniable impact on the stock market, which extends to 401ks. Here are some guidelines to make sure your 401k plan stays on track and is protected during this coronavirus-focused time.

Source: Usnews.com, March 2020

401k Plan Sponsors Fiduciary Duty in Light of Coronavirus Fear

Time will tell if the 2020 Coronavirus becomes virulent that created long-term buying opportunities for alert investors or if it is merely a repeat of the 2002/2003 SARS scare. There's no doubt both strains are deadly, and there's nothing wrong with preparing for the worst in terms of personal choices. Now is the time for 401k plan sponsors to seize their fiduciary mantle and provide the guidance and tools plan participants need to dodge emotional decisions that could ruin their chance for a comfortable retirement.

Source: Fiduciarynews.com, March 2020

What Plan Sponsors May Need to Change for SECURE Act

Many SECURE Act provisions are effective on January 1, 2020. Other deadlines apply depending on the change. Plans have until 2022 to make the necessary plan document amendments so long as they comply with the Act's provisions. This 7-page article summarizes highlights of the most significant changes.

Source: Segalco.com, March 2020

Coronavirus Fears Lead to Spike in 401k Trades

With the markets plummeting at the end of February over fears of the repercussions of a worldwide coronavirus outbreak, 401k investors' trades spiked in the final week of the month, marking it as one of the busiest five-day stretches in the 20 year-plus history of the Alight Solutions 401k Index.

Source: Plansponsor.com, March 2020


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