PLANSPONSOR - April/May 2020 - 48

WELLNESS STRATEGIES
Staying
The
Course
Plan before
implementing any
coronavirus-related
distribution provisions
O
ngoing plan sponsor concerns
about plan leakage have become
paramount in recent months,
particularly following the government's
move to ease restrictions on the ability
of workers to tap into their retirement
accounts, says Ary Rosenbaum, managing
partner at The Rosenbaum Law Firm
in New York City.
" We're already in a position where
people aren't saving enough for retirement, "
Rosenbaum says. " Taking money
out of their 401(k) is only going to exacerbate
the problem. But there are some plan
participants who really need the money. "
More than half of Americans felt
behind on their retirement at the end of
last year, according to a Bankrate study,
and that was before we entered a global
pandemic and likely recession.
Short-Term Relief
Under the Coronavirus Aid, Relief and
Economic Security (CARES) Act, participants
may take a coronavirus-related distribution
(CRD) of up to $100,000 from their
workplace retirement account without
paying the 10% early withdrawal penalty;
this is in addition to any other eligible
withdrawals they may take. To qualify,
employees simply have to demonstrate
that COVID-19 created " adverse financial
consequences " for them.
Workers must withdraw the money
by the end of this year, and then they
48 PLANSPONSOR.COM April - May 2020
have three years to repay it or pay ordinary
income taxes on it. The rescue package
also lifts the cap on 401(k) loans from the
lesser of $50,000 or 50% of the vested
balance to the lesser of $100,000 or 100%
of the vested balance, for six months.
It is up to the sponsor to decide
which provisions of the act it wants to
adopt-and to make sure participants
grasp the full impact of taking advantage
of them, Rosenbaum says. Responses
from a mid-April PLANSPONSOR pulse
survey indicated that one-third of respondents
that offer an employer match in
their defined contribution (DC) plan
have discussed reducing or suspending
it. Twenty-one percent have already taken
Art by Jonathan Muroya
action to do so, while 13% said they are
likely to take action.
While plan sponsors may not, of
course, give direct financial advice, they
may provide education about the potential
long-term effects of the new provisions,
and they should reach out to service
providers to see what resources they might
be able to offer, says Kathleen Dulko, a
Certified Public Accountant (CPA) and
Certified Plan Fiduciary Advisor (CPFA)
with Ashford Investment Advisors in
Daytona Beach, Florida.
Many recordkeepers have already
built the systems necessary to extend the
coronavirus aid bill's provisions to plan
participants, letting sponsors opt out

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PLANSPONSOR - April/May 2020

Table of Contents for the Digital Edition of PLANSPONSOR - April/May 2020

The Road Ahead
2020 DB Administration Survey
2020 Plan Sponsor of the Year Finalists
2020 PLANSPONSOR Service Stars
Same but Different
It Takes Two
Staying the Course
PLANSPONSOR - April/May 2020 - Cover1
PLANSPONSOR - April/May 2020 - Cover2
PLANSPONSOR - April/May 2020 - 1
PLANSPONSOR - April/May 2020 - 2
PLANSPONSOR - April/May 2020 - 3
PLANSPONSOR - April/May 2020 - 4
PLANSPONSOR - April/May 2020 - 5
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PLANSPONSOR - April/May 2020 - 15
PLANSPONSOR - April/May 2020 - 16
PLANSPONSOR - April/May 2020 - 17
PLANSPONSOR - April/May 2020 - The Road Ahead
PLANSPONSOR - April/May 2020 - 19
PLANSPONSOR - April/May 2020 - 20
PLANSPONSOR - April/May 2020 - 21
PLANSPONSOR - April/May 2020 - 2020 DB Administration Survey
PLANSPONSOR - April/May 2020 - 23
PLANSPONSOR - April/May 2020 - 24
PLANSPONSOR - April/May 2020 - 25
PLANSPONSOR - April/May 2020 - 2020 Plan Sponsor of the Year Finalists
PLANSPONSOR - April/May 2020 - 27
PLANSPONSOR - April/May 2020 - 28
PLANSPONSOR - April/May 2020 - 29
PLANSPONSOR - April/May 2020 - 30
PLANSPONSOR - April/May 2020 - 31
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PLANSPONSOR - April/May 2020 - 35
PLANSPONSOR - April/May 2020 - 36
PLANSPONSOR - April/May 2020 - 37
PLANSPONSOR - April/May 2020 - 2020 PLANSPONSOR Service Stars
PLANSPONSOR - April/May 2020 - 39
PLANSPONSOR - April/May 2020 - 40
PLANSPONSOR - April/May 2020 - 41
PLANSPONSOR - April/May 2020 - 42
PLANSPONSOR - April/May 2020 - 43
PLANSPONSOR - April/May 2020 - Same but Different
PLANSPONSOR - April/May 2020 - 45
PLANSPONSOR - April/May 2020 - It Takes Two
PLANSPONSOR - April/May 2020 - 47
PLANSPONSOR - April/May 2020 - Staying the Course
PLANSPONSOR - April/May 2020 - 49
PLANSPONSOR - April/May 2020 - 50
PLANSPONSOR - April/May 2020 - 51
PLANSPONSOR - April/May 2020 - 52
PLANSPONSOR - April/May 2020 - Cover3
PLANSPONSOR - April/May 2020 - Cover4
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