CARES (Coronavirus Aid, Relief and Economic Security) Act
Congress has passed the Coronavirus, Aid, Relief and Economic Security (CARES) Act with provisions to positively impact retirement plan participants and plan sponsors. Among many other provisions, the CARES Act allows participants affected by the 2020 coronavirus pandemic to have greater access to retirement funds. The new law loosens the in-service distribution restrictions that apply to many retirement plans and significantly eases the tax burden on qualified individuals who take distributions from qualified retirement plans or IRAs. For qualified individuals, the CARES Act also expands the qualified plan loan rules; and for all retirement plan participants and IRA owners, and temporarily waives required minimum distributions from defined contribution plans and IRAs for 2020.
Most of the provisions providing relief apply to “qualified individuals” consisting of persons who:
- are diagnosed with COVID-19;
- have a spouse or tax dependent who is diagnosed with COVID-19; or
- experience adverse financial consequences as a result of:
- being quarantined due to COVID-19;
- being furloughed or laid off or having work hours reduced due to COVID-19;
- being unable to work due to lack of child care due to COVID-19; or
- the closing or reduction in hours of a business owned or operated by the participant due to COVID-19.
Although Highland’s 403(b) Plan does not normally offer a loan option, that is being waived during this time. Below is additional information on the CARES Act. If you have been impacted by the COVID-19 pandemic and need to obtain a distribution or loan under the CARE Act provision through your 403 (b) plan account, or have questions, please contact our plan administrator, TCG Services, at (800) 943-9179.