In an effort to further help individuals and employers, the CARES Act has enacted provisions that create temporary relief through employer benefit plan changes for 2020.
Employer Benefit Plan Provisions for 2020 will:
- Defer employer contribution minimums
- Defers 2020 minimum required contributions (including quarterly contributions) for single-employer plans to January 1, 2021
- The amount of any deferred contributions is increased by interest accruing for the period between the original due date for the contribution and the payment date, at the effective rate of interest for the plan for the plan year which includes such payment date
- Increase hardship distribution amount, and extend repayment
- Allows participants to take a coronavirus-related distribution of up to $100,000 from their retirement plan or IRA without a 10% early withdrawal penalty
- Eligible distributions can be taken up to December 31, 2020
- Coronavirus-related distributions may be repaid within three years
- The plan administrator may rely on an employee’s certification that the employee satisfies the conditions for a coronavirus-related distribution
- Increase participant loan amount, and delay repayment
- Allows participants to borrow up to $100,000 from qualified plans (an increase from $50,000 previously allowed)
- Repayment can be delayed
- Halt required minimum distributions (RMDs)
- Temporarily suspends RMDs for 2020
Should you have any additional questions, please contact a K·Coe advisor. For more business guidance and updates on COVID-19, visit K·Coe’s Resources & Updates page.