RatherBeGolfing

The way I looked at it, if you delay payments for a shorter period, you can only add that shorter period to the loan term. So, if I suspend loan payments for 9 months and re-amortize on 1/1/21, I can only add 9 months to loan term.

What he said.

I think the only other difference is I added the 9 payments I skipped at the end, and I think you added a full year right?

$50K loan, 5% interest, monthly payments starting 7/1/19. 4/1/20 - 12/1/20 payments delayed. 1/1/21-3/1/21 payments per original schedule. Balance remaining after 3/1/21 payment re-amortized over remainder of original term plus 9 months. Monthly payments increase from $943.56 to $982.04 as of 4/1/21. CARES Amt Sch.pdf

5 Year term , Monthly payments, #10 due 4/1/20 #10-18 delayed by a year #19 is due 1/1/21 #20 on 2/1/ #21 on 3/1/21 #22-60 & #10-18 are re amortized as of 4/1/21 as payments #22-69, Final repayment date is 6/10/24 3/1/25 rather than original 6/1/24. *edited to fix a date

How is it harder? A simple snap on amendment by 2022 and you dont have an issue.

The plan can force a distribution, but the distribution would not be an RMD...

Yep, that is what I'm seeing too. Some are adding both, most are adding one, some are not adding them at all (at least until absolutely necessary). As a "wholesome employer" moment, I spoke to a small employer yesterday where the owners are maximizing the CVD loan and distribution to not lay off or furlough the employees. They hope that between CVD loan/dist and PPP, they can continue to pay employees until business can start bringing money in again.

No

The use of "shall" seems clear, but the KETRA comparison is very compelling.

Yep same here. However, there is also the "or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate)", so we may be able to get regulatory expansion..

Agreed. 2202(b)(2) (2) DELAY OF REPAYMENT.—In the case of a qualified individual with an outstanding loan (on or after the date of the enactment of this Act) from a qualified employer plan (as defined in section 72(p)(4) of the Internal Revenue Code of 1986)—

Depending on plan size and fee, just about anything is feasible.

I always try to forget about those pesky DBs...

All RMDs suspended for 2020

No relief in CARES. ARA is pushing to have it included in the fourth round of legislative relief. Yes to notice and testing

Agreed. Per 2202(a), a coronavirus-related distribution is any distribution up to $100,000, made from an eligible retirement plan , made on or after January 1, 2020 and before December 31, 2020 to a qualified individual. As long as it meets 2202(a) it should qualify.

To your specific question: No, a plan cannot continue to pay RMDs for 2020, because there are no RMDs for 2020. The CARES Act amends section 401(a)(9) so that it does not apply for 2020. That means that distributions from plans that would have been an RMD but for the CARES Act are rollover eligible. As pointed out by others, there may be other language that forces a participant to take a distribution, but it would not be RMD language per 401(a)(9)

2202(b)(2)(A) if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the date of the enactment of this Act and ending on December 31, 2020, such due date shall be delayed for 1 year 72(p)(2)(B) is the 5 year maximum term, 72(p)(2)(C) is substantially level amortization requirement Id say the actual payment per the amortization schedule would need to be scheduled on or after March 27, 2020

Most of what I have seen, at least before the final language was available, referred to it as a hardship distribution. I don't think so. Since "laid off" is one of the qualifying reasons, I don't see how it could exclude a terminated employee. But if it does, you could roll to an IRA and then take tax favorable distribution right?

its not vague. Individual diagnosed is (I) Spouse diagnosed is (II) (III) is the individual experiences adverse financial consequences as a result of being quarantined, being furloughed or laid off or having work hours reduced due to such virus or disease, being unable to work due to lack of child care due to such virus or disease, closing or reducing hours of a business owned or operated by the individual due to such virus or disease, or other factors as determined by the Secretary of the Treasury (or the Secretary’s delegate). The individual cannot claim hardship due to spouse being quarantined (without a diagnosis), but could claim hardship if individual is quarantined or cant go to work due to lack of child care No, the bill states adverse financial consequences as a result of being quarantined, etc.

It is not a HIPPA issue as the plan administrator. The reason it was written that way is to not require employers to make that determination or hold up the relief. That way, an employer can give the employee the loan or distribution when they ask and not disqualify the plan by doing so. It is not to protect the privacy of an employee.

Thats not the point though. The Cares Act requires that you or your spouse is diagnosed with SARS– CoV–2 or COVID-19, oror that you experience adverse financial consequences due to being unable to work or having reduced hours at work. That is debatable, but really not the point. The individual has to experience adverse financial consequences caused by the virus. The list includes being quarantined, laid off, furloughed, reduced hours, unable top work due to lack of child care, or closing or reducing hours of a business owned or operated by the individual. Many will fit into this category, but not all. As the employer, you are correct. As the plan administrator, you are incorrect. Not really. but they don't want to be part of something fraudulent, or see the all the contributions it has made for its employees get erased without good reason.

2202(a)(4)(B) (B) EMPLOYEE CERTIFICATION.—The administrator of an eligible retirement plan may rely on an employee’s certification that the employee satisfies the conditions of subparagraph (A)(ii) in determining whether any distribution is a coronavirus-related distribution. "may rely on" indicates that the administrator is not required to verify that employee's claims are true. It does not prevent the administrator from requesting something to verify the claim. If the administrator knows that the claims are false, I think you have to deny the claim. You cant rely on someones statement if you know it is false. That said, I tend to agree with Mike that an employer cant know everything about its employees, even the ones they are very close to.

Nothing in 2202(a)(4)(A)(ii) limits it to the plan sponsor. You could have an account balance in a plan from a former employer and still meet the requirements for qualified individual. 2202(a) limits coronavirus-related distributions to any distribution from an eligible retirement plan made on or after January 1, 2020, and before December 31, 2020 to an individual that satisfies the conditions of 2202(a)(4)(A)(ii). 2202(b) limits coronavirus-related loans to any loan to a qualified individual made during the 180- day period beginning on the date of the enactment. (b) only requires that the loan be made after the enactment The employee certification only references the administrator of an eligible retirement plan and an employee.