Ask the Experts

[...]whether you are the sponsor of a preapproved document or an individually designed one, if you maintain a retirement plan, there will be need to work with the document provider as soon as possible to ensure there is sufficient time to prepare amendments and there is sufficient time to review them before the end of the year. [...]the time to think about all of this is now, as any plan amendments resulting from the following legal changes will need to be prepared, reviewed and adopted by the end of 2022. The distribution can be reported as income all at once or over a period of three years and may be repaid tax-free over a three-year period from the date of the distribution. * Increased Loan Limits: o Plans could increase the limit on participant loans for "qualified individuals" up to the lesser of (i) $100,000, or (ii) 100 percent of the participant's vested account balance on loans taken on or after March 27, 2020, and before September 23, 2020. * Suspended Loan Repayments: о Plans could suspend loan repayments due between March 27, 2020, and December 31, 2020, for up to one year for "qualified individuals." * Waiver of Required Minimum Distributions in Calendar Year 2020: о RMDs due in 2020 under defined contribution plans (including those who turned age 70 1/2 in 2019 and would have had to take their first RMD by April 1, 2020) were waived and the five-year period for postdeath distributions was determined without regard to the 2020 calendar year. Taxpayer Certainty and Disaster Tax Relief Act of 2020 This legislation, part of the Consolidated Appropriations Act, 2021, was intended to provide additional relief to plan participants who incurred hardship as a result of the COVID-19 pandemic and other qualified disasters. * Coronavirus-Related Distributions: о Money purchase pension plans, and not just defined contribution plans, could permit the same in-service distributions introduced by the CARES Act (and described earlier). * Distributions and Increased Loan Limits for Other Qualified Disasters: о Plans