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week ending June 5th, 2020
With new rules for retirement plan loans and withdrawals and multiple guidance about relief offered to employers during the COVID-19 pandemic, your head may be spinning from thinking about what needs to be done and when. PLANSPONSOR will give you updates as they happen, but we’ve also partnered with Carol Buckmann, with Cohen & Buckmann P.C., to break things down for you. Each week, she will explain legislative provisions or official guidance related to the COVID-19 pandemic that affect retirement and health plan sponsors. You can find her insights in this edition of PLANSPONSOR Weekend, and look for the next installment about the expansion of health benefit elections on Monday. Have a happy and safe weekend!
Editor's Choice
COVID-19 Compliance Corner: Who Qualifies for Coronavirus-Related Distributions?
Coronavirus Aid, Relief and Economic Security (CARES) Act distributions up to $100,000 have been authorized by Congress through the end of the year, but they are not mandatory. If a plan allows special CARES Act distributions, only participants who are qualifying individuals who have been affected by COVID-19 will be eligible to receive them.
COVID-19 Compliance Corner: New Loan Provisions Under the CARES Act
The Coronavirus Aid, Relief and Economic Security (CARES) Act provides temporary relief from some plan loan requirements for loans made and repayments due beginning March 27. These provisions apply to qualified plans but, unlike the distribution provisions, do not apply to individual retirement accounts (IRAs).
COVID-19 Compliance Corner: How Are Coronavirus-Related Distributions Taxed?
The tax rules that usually apply to retirement plan distributions do not apply to coronavirus-related distributions (CRDs). Instead, there are special rules for distributions made to “qualified individuals” affected by the coronavirus.
COVID-19 Compliance Corner: Deadline Extensions Provide Relief to Retirement Plan Sponsors
The IRS and the Department of Labor (DOL) have provided welcome relief to plan sponsors who are unable to meet plan deadlines due to the coronavirus, including those whose vendors and third-party administrators (TPAs) may have been closed or have been working at reduced capacity due to lockdowns or illness.
IRS Provides Additional Deadline Relief to Plan Sponsors
Deadlines have been moved for single-employer and multiemployer DB plans and 403(b) plans, among others.
Popular Reads
2020 Defined Benefit Administration Survey
Ask the Experts
Clarification of Loan Repayment Delay Provisions of CARES Act
Experts from Groom Law Group and Cammack Retirement Group answer questions concerning retirement plan administration and regulations.
Use of Fidelity Active Management Funds Questioned in Court
Multiple lawsuits have been filed recently that question the offering of active management funds to retirement plan participants.
Get Beneficiary Designation and Missing Participant Practices in Order
The pandemic has highlighted the need for plan sponsors to actively encourage revised beneficiary designations and have missing participant procedures in place.
Improving Participant Outcomes With Custom TDFs
Off-the-shelf TDFs may not meet the needs of participant demographics, so plan sponsors can build custom TDFs to provide greater diversification and less risk near retirement.
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