(Updated 4/8/2020)

There have been quite a few changes with legislation coming out of Washington.  The newly enacted CARES ACT (Coronavirus Aid, Relief, and Economic Security Act) offers several things for retirement plans.

The following are based on current interpretations of the new law and may change as additional guidance is provided by the IRS/DOL.  All of the following changes are optional and will require plan amendments.  The current deadline for the amendment is the last day of the plan year beginning on or after January 1, 2022.  For calendar year plans, this would mean that the amendment(s) would need to be in place by December 31, 2022.

Plan providers/recordkeepers, including Pentec, may require notification of interim changes, or revisions to any contracts currently in place.  The timing and availability of these features will also depend on the implementation by the recordkeeper.


  • Allows distributions of up to $100,000 to be taken penalty-free.
  • Only to an individual: (1) who is diagnosed with COVID-19, (2) whose spouse or dependent is diagnosed with COVID-19, or (3) who experiences adverse financial consequences as a result of COVID-19. 
  • Adverse financial consequences includes the results of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to lack of child care, closing or reducing hours of a business owned/operated by the individual, or other factors as determined by the Treasury Department.  Consequences must be related to COVID-19.
  • Repayment of these distributions may be made within 3 years of taking the distribution.
  • May be included in individual’s taxable income over a 3 year period.
  • Standard withholding will be 10%, instead of the normal mandatory 20% withholding.
  • Distributions available until December 31, 2020.


  • Loan limits increased to the lesser of $100,000 or 100% of vested balance.
  • Applies to same individuals outlined in Withdrawals section above.
  • Currently this ends 180 days from March 27, 2020.
  • Current loans may delay payments due between March 27 and December 31, 2020 for up to one year.  Interest will continue to accrue on these delayed payments.
  • Delay of payments may extend the term of the loan for up to one year.

 RMDs (Required Minimum Distributions)

  •  RMDs may be waived in 2020.  This includes 2019 distributions delayed until April 1, 2020.

Investment Platform CARES Act Information Links.

Some sites may require the plan sponsor to log-in.


(Coronavirus Aid, Relief, and Economic Security Act)