As a result of the far-reaching outbreak of the coronavirus across the country, we are now finding ourselves navigating through unchartered waters. Extraordinary measures, in the form of unprecedented legislation, has been enacted in an effort to sustain a strong economy. 

The $2.3 trillion stimulus package, known as the CARES Act, includes a wide range of standards and guidelines, several of which are applicable to the administration of employee benefit plans.

For Plan Administrators, business owners, CEOs/ CFOs, there is a focus on changing the rules regarding use of the retirement funds, such as deferring contributions, relaxing the regulations governing hardship distributions and participant loans and the repayments of these while also temporarily postponing the required minimum distribution rules for 2020.Here are some further details regarding the changes that impact employee benefit plans:

  • Employer contributions to single-employer defined benefit plans – In this circumstance, single employer plans can defer the 2020 minimum required contributions (including quarterly contributions) to January 1, 2021.
  • Hardship distributions-This provision allows participants to take a coronavirus-related distribution of up to $100,000 from their retirement plan or IRA without a 10% early withdrawal penalty up to December 31, 2020. In addition, coronavirus-related distributions may be repaid within three years. For the employee to be eligible to take advantage of the hardship distribution, the plan administrator may rely on the employee's certification that he/she satisfies the conditions for a coronavirus-related distribution.
  • Participant loans - Participants may borrow up to $100,000 from qualified plans (an increase from $50,000 previously allowed), and the repayment can be delayed.
  • Required minimum distributions (RMDs) – The CARES Act temporarily suspends RMDs for 2020.

In this brief summary we have shared the general highlights of the CARES Act that are most meaningful for those with responsibilities to execute their company’s Employee Benefit Plan. If you have questions or concerns about these changes and how they relate to your situation, please feel free to contact me at