We seek to keep our partners apprised of recent changes and potential legislative actions that may have an impact on the plans and plan participants we serve.

Security Act

The Coronavirus Aid, Relief and Economic Security Act

The CARES Act was signed into law on March 27, 2020 in response to the public health crisis and economic fallout resulting from COVID-19. The act includes several provisions that are intended to positively impact plan participants and plan sponsors.

Timing of Plan Amendments for the optional relief provisions:

PLAN DOCUMENT CHANGES – Plan Sponsors can immediately adopt the optional plan design provisions in practice, provided that the plan formally amends the plan document for the optional changes by the last day of the plan year ending in 2022 (2024 for governmental plans). The Ryding Company is awaiting further guidance with respect to the actual amendments and necessary language. In the meantime, please contact your dedicated Consultant to discuss your options for electing.

RECORDKEEPER CHANGES – Please be on the lookout for additional communication from your recordkeeping vendor so that you are aware of how they intend to execute the optional provisions. For example, some vendors may elect to automatically implement these changes unless a plan sponsor specifically “opts-out” of the optional provision changes


Description of Relief

Coronavirus-Related In-Service Withdrawals

Plan Sponsors may rely on participant’s certification for eligibility such as: individual participant, their spouse or their dependent has been diagnosed with COVID-19 or the participant suffered adverse financial consequences due to COVID-19

This relief is available until December 31, 2020

✓ If allowed by the plan, participants affected by COVID-19 may withdraw up to $100,000 from their vested account balance between January 1,2020 and December 31,2020.

✓ Not subject to the 20% mandatory federal tax withholding.

✓ Exempt from the 10% early withdrawal penalty that is applicable to distributions made to participants under age 59 ½.

✓ Eligible to be indirectly rolled into an IRA or employer plan within 3 years from date of distribution.

✓ Amounts not indirectly rolled over are included in gross taxable income, ratably, over 3 years beginning with the tax year of the distribution, unless the participant elects to include all amounts in a single tax year.

Coronavirus-Related Loan Relief

Plan Sponsors may rely on participant’s certification for eligibility such as: individual participant, their spouse or their dependent has been diagnosed with COVID-19 or the participant suffered adverse financial consequences due to COVID-19

This provision is effective on the date of enactment (March 27, 2020) and ends 180 days after enactment.

✓ A plan may allow eligible participants to take a loan up to the lesser of $100,000 or 100% of the participant’s vested account balance.

✓ If requested by an eligible participant, plan sponsors must suspend loan repayments due on outstanding loans (that are in good order) for up to 1 year.

✓ The suspension period will be added to the original loan term when repayments, including accrued interest resume regardless of the length of the original loan term.

✓ Deemed loans are not eligible for relief.

✓ Suspension of payments is not permissible for repayments that were due prior to the CARES Act being executed on March 27,2020 or for payments due after December 31,2020.

✓ Participants who are furloughed or temporarily laid off but who are considered to be active employees may also suspend loan repayments for up to 1 year of unpaid leave.

Required Minimum Distributions

✓ Waives the requirement for an RMD that is required to be paid in 2020 that has not yet been paid. This includes participants who turned age 70 ½ prior to 2019 with ongoing RMD’s occurring in 2020, as well as participants who turned 70 ½ in 2019 who did not yet receive their first RMD for 2019 or their 2020 RMD. The waiver is extended to Beneficiary RMD’s as well.

Defined Benefit/Cash Balance Plan Relief

✓ Single Employer funding obligations due during 2020 are not required to be made until January 1, 2021.

✓ Note that interest on delayed contributions from the original due date to the payment date of January 1, 2021 must also be paid

✓ A plan sponsor may elect to apply the plan’s funded status for the 2019 plan year in determining the application of lump sum benefit restrictions for plan years which include calendar year 2020.

Additional Relief Proposals (not yet approved) that are being sought by The American Retirement Association…

Provision REQUESTS

Description of Relief

Defined Contribution Required Employer Contributions

✓ Requests for suspension of any required employer contributions for 2020.

✓ Requests to allow Plan Sponsors with fewer than 500 participants to waive any employer contributions that have not yet been made to satisfy their 2019 obligations.

✓ Requests to allow Plan Sponsors using these options to not be subject to nondiscrimination rules or top-heavy requirements for the year.

Requested Relief from IRS and Department of Labor

✓ Requests automatic extension to October 15th for Form 5500.

✓ Requests that safe harbor plans may be amended to reduce or cease contributions without 30-day notice.

✓ Requests no partial termination if business affected and employees rehired by December 31, 2020, or Under facts and circumstances a partial termination did not occur if no more than 6 months after national emergency order is lifted that the number of participants is at least 80% of amount on March 13, 2020 (date national emergency declared).