2020 has been a difficult year with many unexpected challenges. For companies that sponsor retirement plans, some of these challenges came in the form of the Coronavirus Aid, Relief, and Economic Security (CARES) Act. While the CARES Act provided much needed relief to plan sponsors and their participants, the relief also brought new complexity to retirement plan compliance.
The Coronavirus Aid, Relief, and Economic Security Act (CARES Act) was signed into law on Friday, March 27, 2020. Besides the generalized financial relief afforded to individuals, as well as loans and other concessions for businesses, the massive relief bill for those suffering as a result of the Coronavirus Pandemic includes many provisions to help participants and employer sponsors of retirement plans.
The SECURE Act represents some of the most significant changes to retirement plan law since the passage of the Pension Protection Act of 2006, over thirteen years ago. The provisions of the Act are broad ranging and span many different effective dates.
The first quarter of the calendar year typically sees an uptick in the number of retirement plan distributions and participant loans. This year may be even busier than most, given the relief announced by the IRS for victims of the recent hurricanes and wildfires. Whatever the reason, participant distributions present a complex set of rules for Plan Sponsors to navigate.