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The CARES Act provides potential relief to retirement plan participants

April 14, 2020
Bryant Magee
Bryant Magee

While most of the discussion about the Coronavirus Aid, Relief, and Economic Security (CARES) Act has focused on direct cash payments to individuals and loan relief for small businesses, the law also provides some relief to retirement plan participants.


CARES Act retirement plan provisions


The sweeping $2 trillion stimulus bill includes changes to retirement plans for individuals impacted by the COVID-19 pandemic:

  • Creates the Coronavirus-related (CRD) distribution allowing participants to access up to $100,000 from their retirement plan regardless of age with no penalty, and the ability to return the funds to the plan within three years.
    • Eliminates the 10% penalty on CRDs from a retirement plan or IRA for individuals who are directly impacted by COVID-19.
    • Individuals may repay the CRD back to the plan within three years from the date of the withdrawal. Those repayments would not be subject to the retirement plan contribution limits.
    • Additionally, individuals can pay tax on the income from a CRD over a three-year period (subject to further guidance). 
  • Expands loan limits to the lesser of $100,000 or 100% of a participant’s vested account balance and allows for participants to suspend loan repayments for up to one year.
  • Required Minimum Distributions (RMDs) in 401(k), 403(b), 457(b) and IRA plans are suspended for calendar year 2020, eliminating the requirement for individuals to liquidate assets in a down market.
  • Delays the contribution due date for single-employer defined benefit plans.

Note: The CARES Act does not require businesses to enact these measures, so individuals should check with their company’s retirement plan administrator to ensure that they are eligible to participate in this program.


Download this overview for companies and business owners and learn more about the impact on company-sponsored retirement plans.


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This information is being provided as a resource for our clients. All information is based on our current understanding of the changes to retirement provisions as set out in the Congressional Act, and is subject to further interpretation and clarification as regulations and guidance are issued by regulatory agencies, including the Internal Revenue Service.


The information, views, opinions, and positions expressed by the author(s), presenter(s) and/or presented in the article are those of the author or individual who made the statement and do not necessarily reflect the policies, views, opinions, and positions of Hancock Whitney Bank. Hancock Whitney makes no representations as to the accuracy, completeness, timeliness, suitability, or validity of any information presented.


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