Pandemic Relief for Retirement Plans

The CARES Act, passed in March 2020, contained several provisions related to qualified retirement plans. It relaxed certain rules pertaining to hardship distributions, plan loans, and required minimum distributions, as well as expanded the authority of the DOL to postpone certain deadlines under ERISA. Most of these relaxed rules were only effective through 2020. As the COVID-19 pandemic drags on, Congress may decide to extend some of these programs or pass additional relief in 2021.

Congress passed legislation in the final days of 2020 that included a temporary rule preventing “partial plan terminations” so long as a plan’s active participant count on March 31, 2021 is at least 80% of what it was on March 13, 2020.  This could allow certain plan sponsors to avoid the consequences connected to a partial plan termination, the most significant of which being terminated participants automatically become 100% vested in plan benefits.

The rules and regulations concerning employee benefit plans are constantly changing – and 2020 was no exception. Many of the relaxed retirement plan rules provided for in the CARES Act that was passed in March 2020 expired at the end of the year. As the future of the pandemic is uncertain, so too is the outlook for retirement plan relief.

Schreiber Accounting and Advisory has published the 2021 Plan Sponsor’s Desk Reference, which is full of information relevant to professionals responsible for administering 401(k) and 403(b) defined contribution plans. Download the 2021 Plan Sponsor’s Desk Reference.

Schreiber Accounting and Advisory offers plan audit services for 401(k) and 403(b) plans, as well as other types of employee benefit plans. Contact the firm for more information.

Material discussed is for informational purposes only. It is not to be interpreted as investment, tax, or legal advice. Individual situations vary, and this information should only be relied upon when coordinated with individual professional advice.