Employees who have supplemental retirement accounts and are experiencing financial hardship have new withdrawal and loan options under the Federal Coronavirus Aid, Relief and Economic Security Act (CARES Act).
The USM Supplemental Retirement Plans (SRA) adopted changes under the CARES act to its TIAA and Fidelity 401(a), 403(b), and 457(b) plans. The CARES Act was created to provide financial relief to individuals and families, small businesses, and the aviation, healthcare, and education sectors.
Please see the following USM memo.
Coronavirus-related Distributions
- 10% early withdrawal penalty and 20% tax withholding waived
- $100,000 limit across all SRA plans
- Income taxed over three years with taxpayer ability to re-contribute within three years regardless of that year’s cap
- Participants self-certify that they’re impacted
Coronavirus-related Loans
- Loan limit increased to the lesser of $100,000 or all of vested account balance
- Repayments due between the date of CARES enactment and year-end delayed one year
- Participants self-certify that they’re impacted
- Existing loan payments may be suspended through the end of the 2020 calendar year. Payments will begin again in January 2021.
- Request a Suspension of Required Minimum Distributions (RMDs) due in 2020
- Initial RMDs still due to be taken before April 1, 2020
- Participants who want to continue taking their distributions will be able to do so.
- Financial vendors can verify if you meet RMD criteria
Employees experiencing hardship can contact their respective retirement vendors for rules, details, and to start the distribution process.
Employees who wish to change their contributions can do so by completing an SRA change/enrollment form. Forms can be found here.