CARES Act Loan and Distribution Provisions – On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic (COVID-19).  The law contains certain provisions affecting qualified retirement plans.

Defined Contribution Plans

The CARES Act includes provisions that provide participants with access to their vested account balance without penalties.  Further, the CARES Act enables participants to defer loan repayments and to skip taking Required Minimum Distributions during 2020. The link to the flyer below provides an explanation of the types of financial relief available and the new distribution and loan provisions added to the DAP.

What to do when you need financial relief participant flyer

2020 RMD Suspension – On March 27, 2020, Congress passed the Coronavirus Aid, Relief, and Economic Security Act (“CARES Act”) to provide emergency assistance and health care response for individuals, families, and businesses affected by the 2020 coronavirus pandemic (COVID-19).  The law contains certain provisions affecting qualified retirement plans.

Below you will find information on how your DAP account will be affected by the 2020 Required Minimum Distribution suspension:

For 2020, Required Minimum Distributions (RMDs) are NOT required for defined contribution plans.

1. Empower will NOT automatically pay out any RMDs to those who do not take them or have not met their full RMD amount at the end of 2020.
2. Participants who are receiving installment payments that are intended to meet their annual RMD requirement will NOT have those payments stopped in the event they need them for their living expenses.
3. Empower, the DAP recordkeeper, will communicate with participants receiving automatic/installment payments that they have the option to suspend those for the rest of 2020 and reinstate them beginning in January 2021. This communication will be coming in the next few weeks.
4. For participants who turned 70.5 in 2019, and had deferred all or some of their RMD that was not paid by December 31, 2019 (due by April 1, 2020), Empower did not force out this amount.
5. For any RMD payments already received, participants may choose to keep the payment or rollover the payment back into the DAP as an indirect rollover (if eligible).  Participants may also choose  to rollover these 2020 RMD payments into another qualified plan or an IRA (if the withdrawal is now considered eligible for rollover). Participants have 60 days from the date of withdrawal to complete the rollover.
6. At this time, the IRS has NOT extended the 60 day deadline for an indirect rollover

Please contact Michelle in the DAP Executive office 314-739-7373 to stop your RMD, lower your RMD, or to make any changes to your current installment payment.  She can also assist you with the indirect RMD rollover.