The CARES Act allows employers to make some changes to their retirement plans to assist participants impacted by COVID-19.

• Employers may allow participants who have been impacted by COVID-19 to take in-service distributions of up to $100,000, without paying the tax penalty for early distributions;
• Employers that allow plan loans may increase the loan amount and extend the repayment period for participants impacted by COVID-19; and
• Required minimum distributions are waived for 2020 for participants in defined contribution plans, such as 401(k), 403(b) and governmental 457(b) plans.

Employers that sponsor tax-qualified retirement plans should become familiar with the CARES Act changes for their plans. Employers should work with their retirement plan advisors to implement changes for their plans.

Employers should communicate these changes to employees through a summary of material modifications (SMM). Retirement plan documents must also be amended for the changes, but the deadline for making these amendments will not be earlier than the last day of the first plan year beginning after Jan. 1, 2022 (that is, Dec. 31, 2022 for calendar year plans).

Refer to the attached Compliance Bulletin for details and contact your NEEBCo representative with questions.

CARES Act Makes Changes for Retirement Plans