The Coronavirus, Aid, Relief and Economic Security (CARES)Act

The Coronavirus, Aid, Relief and Economic Security (CARES) Act was passed into law on March 27, 2020.

The CARES Act contains provisions to allow Plan Sponsors to amend their qualified retirement plan to create additional financial resources for their employees.  The loan and hardship provisions of the ACT are optional and not mandatory.  As a result, qualified plan professionals have a great opportunity to contact their plan sponsor clients to discuss the provisions and determine the appropriateness of implementing all or some of the provisions to assist their employees through this pandemic.

It is important to check with the recordkeeper the Plan is utilizing to determine how these unique provisions can be implemented.  Most recordkeeping systems are set up for traditional loan and hardship provisions and will need to be changed or alternate processes implemented in order to fulfill the participant’s request.

To learn more about the CARES Act, take a look at the FAQs addressed by the American Retirement Association.

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