A Checklist for Sponsors to Consider Before Adopting Retirement Plan Provisions of the CARES Act

“As a retirement plan sponsor, you might have directly heard from your plan recordkeeper (a/k/a third-party administrator (TPA)) regarding the following optional provisions of the CARES Act:

• The potential grant of special loan rights for “qualified individuals” (defined here) (“COVID Loans”),

• The delay in repayment of any plan loan for qualified individuals (“COVID Loan Repayment Delay”),

• The potential grant of special withdrawal rights for qualified individuals (“COVID Withdrawals”),

• Not paying Required Minimum Distributions (“RMDs”) this year, and

• The potential waiver of fees for COVID Loans and COVID Withdrawals (“COVID Fees”)

Many recordkeepers/TPAs are not prepared to answer all of the following questions, as everyone is still working out how the above provisions will be administered and whether all of the provisions should be adopted. Below is a list of issues employers should consider before making any final decisions on CARES Act plan amendments. Even if you have already given instructions to your recordkeeper, we recommend that you review this list to determine whether to revise or re-address any of those instructions.” See list here.

Source: Husch Blackwell LLP