RatherBeGolfing

100% this.

@Ian what is it that you are trying to achieve / what is the reason for your question? Are you in the retirement industry, or are you an affected party? The answer to your question is not going to be a simple yes or no, so it will help to know how the answer the question

@EBECatty Agreed. It has also been very helpful when looking at the loan provisions. There is also a bit of a conflict between plan and individual treatment of distributions. The plan can treat a distribution to a qualified individual as a CRD, unless the aggregate distributions from all plans maintained by the employer (and any member of any controlled group which includes the employer) to such individual exceeds $100,000. The Individual on the other hand, can designate any distribution as a CRD as long as the total amount does not exceed $100,000. So if I take $50,000 from my IRA (and intend to designate is as a CRD) and $100,000 from my 401(k), I can only designate $50,000 from the plan as a CRD. The plan can treat the entire $100,000 as a CRD. Should the plan's default be to treat any distribution to a qualified individual as a CRD as long as it does not exceed $100,000, or should the plan leave it up to the participant to tell the plan if less than 100% of the distribution should be treated as a CRD, and treat the remainder as normal distribution?

"any and all" is one of those old legal doublets they teach you not to use anymore. They usually mean the same or close to the same, and they want you to use the most appropriate single word instead. I'd say any refers to an unknown number. It could be one, a subset, or all. All refers to... all, or every one. If the intent was to define all repayments, they would have used all rather than any.

It says if the due date for a payment occurs between enactment and December 31, 2020, such due date shall be delayed for a year. The language is very clear. Nowhere does it say say you have until December 31 to delay Really? Where do you see "all"? Where do you see "one year delay"?

missed that part :)

Then (A) is pointless, and that is just not how statutes are drafted

That is how IRS interpreted KETRA...

JH CARES - withdrawal form.pdf John Hancock CRD form

But only if the participant is a qualified individual, right? If I don't the definition of qualified individual, I don't get tax relief. So you would still have to ask all the CD/CRD questions (regardless of plan adoption) just to figure out if 10% default or 20% required applies. If you fail to withhold when you have to, that could be an issue too.

Follow up from above... So what if I took $120,000 distribution today, from a plan that elected to not adopt CRDs. 10% default on the first $100,000 and 20% on the last $20,000?

I think you guys have changed my mind on how it applies to the participant, in other words participant tax treatment is separate from plan treatment. I'm still struggling with the withholding part though, since the plan is required to withhold. And if you don't adopt the optional CRD, I guess you would still have to amend if withholding changes applies regardless of CRDs...

It does. It means you get to add the delayed period to the remaining term and add accrued interest. This also tracks with the IRS guidance in Notice 2005-92 in regards to KETRA 103 which is pretty much identical to 2202(b)

Agreed

No. You can only treat it as a CRD if the CRD is offered by the plan. Otherwise it is just a distribution. Correction: Yes...

participant cannot treat a distribution as a CRD if the plan does not offer CRDs... Correction: participant can treat a distribution as a CRD for tax purposes even if the plan does not offer CRDs... No. If the plan does not permit CRDs, the cat is officially dead. Correction: The cat is jumping around in the CARES box...

ARA has requested relief from testing due to suspension of safe harbor contributions during the this crisis.

not200592.113005.end.pdf Notice 2005-92 Loans discussion starts on page 14 (Section 5) Safe harbor is found under Section 5 B on page 15

Correct. The 10% default withholding (rather than 20%) and early distribution penalty relief applies to CRDs only. Other than that, its business as usual. Correction: 10% default would apply for a qualified individual, even if the plan does not adopt CRDs as a distributable event.

Right, but you stopped it, why should you be entitled to the benefits?

This is no different than any other feature that a plan could offer but decides not to offer. Correction: Participant IS still eligible for tax relief The reduced hours are immaterial since the plan does not offer coronavirus-related distributions. Yep. Correction: I guess not until you hit the $100,000

Yea its a mess for sure, especially since we can probably expect the loan delay to be optional even if you adopt CVLs.

Correct, but those are the payments that are delayed. So if the first scheduled payment I delayed was was 4/1/20, that payment has to be repaid 4/1/21. The last payment that can be delayed for a year would need to be scheduled on or before 12/31/2020. Since payments post 12/31/20 cannot be delayed, you would pay your regular scheduled payments until your year of delay is up. In my example, that would be 4/1/21, and that is why I re-amortize as of 4/1/21. I suppose since I delayed repayment and did not re-amortize until after 12, months, I can add 12 months to the end of the loan, rather than the 9 months of no payments at all. But if I re-amortize as of 1/1/21, I start paying on that delayed payment after 9 months, and I should only get to add 9 months to the loan term.

(A) makes it clear that it applies only to payments between enactment and 12/31/2020. There is no other way to interpret that. I interpret subsequent repayments in (B) to mean the subsequent repayment of the delayed payments, adjusted for interest. It means that rather than re-amortizing the remainder with accrued interest over the original loan term, you get to add the delay to the loan term If it was meant to apply to other payments, there is no need to limit the period in (A), they could have just said no loan payments for the next 12 months. (C) is your exception to the loan term limit for the time you add back to the delay. I agree with @MoJo, plain reading of the statute is clear on which payments may be delayed. It is not logical to read "subsequent repayments" in (B) to mean payments in addition to the payments explicitly limited in (A). Logically, (B) refers to the subsequent repayment of the delayed payments, allowing you to extend the repayment term for the period of delay, but requiring that you add interest. In order to not have a conflicting statutory requirements, (C) tells you to ignore the delay added on in (B) for purposes of the maximum term under 72(p).