Hoosier Banker 37 markets have taken a hit in the wake of the coronavirus outbreak. To help savers retain more in their retirement accounts, the CARES Act waives the required minimum distribution (RMD) in 2020 for plan participants, IRA owners and beneficiaries. • RMDs normally required to be taken for 2020 are waived. • This waiver also applies to individuals who turned 70½ in 2019 but who did not take their first RMD before Jan. 1, 2020. In the absence of additional relief, the next RMD for those individuals must be taken by Dec. 31, 2021. • For purposes of counting the five-year period for beneficiary distributions, 2020 is disregarded and one year is added to the remaining period. For example, for deaths occurring in 2019, the five-year period in which the inherited assets must be distributed will end on Dec. 31, 2025, instead of on Dec. 31, 2024. • A distribution that is taken in 2020 – but which is not an RMD because of the waiver – may be rolled over to another eligible retirement plan or to an IRA within 60 days of the distribution. Though such distributions may be rolled over, they are similar to CRDs in that they are not treated by employer plans as eligible rollover distributions for purposes of the 20% mandatory withholding, the 402(f) notice or the direct rollover requirements. Increased maximum plan loan amount. The retirement plan loan maximum for a qualified individual (defined as meeting the COVID-19 or SARs-CoV-2 conditions described previously) is increased to the lesser of $100,000 or 100% of the participant’s vested balance. This increased amount applies to loans made during the 180-day period beginning on March 27, 2020. Delayed plan loan repayment date. Retirement plan loan repayment dates that occur between March 27, 2020, and Dec. 31, 2020, can be delayed for one year, with the amortization period – including the five-year repayment deadline – adjusted accordingly. Funding relief for defined benefit plans. For single-employer defined-benefit pension plans, the minimum required contributions due during 2020 can be delayed to Jan. 1, 2021 (adjusted for interim earnings). Employers also have an option to use an alternative funding target percentage. Expanded Department of Labor authority to postpone certain deadlines. In addition to taking action in response to a disaster or terroristic threat, the DOL may now postpone certain deadlines under ERISA if a public health emergency (like the COVID-19 pandemic) occurs. Amendment guidance. Plan sponsors generally must amend their retirement plans for these provisions by the last day of the 2022 plan year (government plans have an additional two years), or such other date as the Treasury secretary may prescribe, with operational compliance during the interim. Health-Related Provisions Allowable services. Health insurance plans can pay for telehealth and remote care services without first requiring an individual to satisfy a deductible. Such payments will be deemed not to violate existing HSA requirements. This relief applies to plan years that begin on or before Dec. 31, 2021, and promotes diagnosis and treatment while helping individuals avoid possibly risky inperson contact. New qualified medical expenses. Certain medicines or products do not need to be a “prescription” to be qualified medical expenses for HSA, HRA, MSA and health FSA purposes. The CARES Act specifically includes over-the-counter menstrual care products. Although the CARES Act represents the largest relief package in U.S. history, there may be more to come. Government officials have stated that more relief will be available if needed. For now, the CARES Act should help many Americans get some of the financial relief that they desperately need. HB
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