Sen. Patty Murray, D-Wash., is urging the Department of Labor to extend certain deadlines for retirement plan administrators and recordkeepers to allow them to focus on helping American families amid the coronavirus pandemic.
Among the many provisions of the approximately $2 trillion Coronavirus Aid, Relief, and Economic Security (Cares) Act of 2020 — which President Donald Trump signed into law at the end of March — is substantial relief for retirement savers.
Borrowers can now take the lesser of up to $100,000, or 100% of their 401(k) or IRA account assets in loans, which is double the amount they were entitled to before. In addition, retirement savers under 59½ can take hardship distributions of up to $100,000, without incurring the standard 10% penalty for early withdrawals.
Murray, who’s the ranking member of the Senate Committee on Health, Education, Labor and Pensions, says that the DOL should provide at least a 90-day extension for certain Employee Retirement Income Security Act notice and disclosure requirements, she writes in a letter to Preston Rutledge, assistant secretary of labor for the DOL’s Employee Benefits Security Administration.
Doing so would let plan administrators and recordkeepers “prioritize the significant increase of requests and applications from families seeking help managing financial hardship over current filing deadlines,” she writes.
“This increase in requests in conjunction with other competing troubles that businesses are facing may overwhelm plan administrators and record keepers as they also try to juggle filing deadlines,” Murray writes.
The CARES Act amended a section of ERISA to give the DOL the authority to extend deadlines during public health emergencies, according to Murray.
Several recordkeepers have already stepped forward to make it easier for savers to take advantage of the CARES Act’s provisions. Empower Retirement and Voya have waived fees on loans or hardship withdrawals from 401(k) plans.
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