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CARES Act Relief for Retirement Plan Loan Payments is Ending, Now What?

DWC 12/8/20
Facts Earlier this year, we implemented the coronavirus relief provisions that allowed our participants to suspend loan payments for the remainder of 2020. As a result of reduced hours and other financial hardships, we had a number of plan participants take advantage of this relief.
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Is There Any Coronavirus Relief for Participants Who Want to Postpone Plan Loan Payments?

DWC 04/14/20
Facts Several participants in our 401(k) plan currently have outstanding plan loans, and many others are looking to initiate them. However, given the current pandemic, many participants are concerned that they won’t have the funds available to continue making payments right now.
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How Does the CARES Act Expand the Availability of Retirement Plan Loans?

DWC 04/7/20
Facts Our 401(k) plan allows participants access to their accounts via hardship distributions and, for those at least age 59 ½, via in-service withdrawals. But with the economic uncertainty of the current environment, participants are now asking about taking loans from their plan accounts.
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DWC News Update | The CARES Act: Federal Coronavirus Relief

DWC 03/30/20
On Friday afternoon, March 27th, Congress passed, and the President signed, the Coronavirus Aid, Relief, and Economic Security (CARES) Act - sweeping legislation intended to provide much-needed relief due to the coronavirus public health emergency. At nearly 1,000 pages in total, the legislation covers a lot of ground in a many areas. With respect ...
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Do 401(k) Loans Impact a Participant's Credit Score?

DWC 12/10/19
Facts Our 401(k) plan allows participants to take loans from their accounts. We have a written policy that describes how the loans work and spells out the requirements that the plan and participants must follow. Among other details, the loan policy indicates that payments must be made via payroll deduction.
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How Do I Calculate How Much Money is Available for a 401(k) Loan?

DWC 09/24/19
Facts The participants in my company’s 401(k) plan are regularly inquiring about how much money they have available for a loan. When I report back the amount available to them, it’s not unusual for me to hear groans and exclamations from them that “this is my money” (particularly if they’re disappointed they aren’t able to access more). I know ...
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Feeling Defeated in the Battle of Participant Loans? We've Got a Fix for That.

DWC 05/30/19
While not quite as ominous as a battle with the Night King, dealing with participant loans in retirement plans can be a daunting challenge for plan sponsors. Because of Congress’ concerns about protecting plan assets from improper use by participants and plan sponsors alike, the loan rules are strict and unforgiving.
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DWC News Update: The IRS Helps Those Who Help Themselves

DWC 04/22/19
The IRS did its part to make Friday, April 19th a really good Friday for those who sponsor qualified retirement plans. After not making many friends when it jacked up the user fees for the Voluntary Correction Program (VCP) a year or so ago, the IRS has responded to industry requests (that DWC representatives helped draft) by now allowing plan ...
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Plan Loans & Past Participants: What Happens to a Participant's Loan Balance When They Terminate Employment?

DWC 03/5/19
Facts We have a participant who took a loan from his 401(k) account at the beginning of the year. Yesterday, he gave us notice of his resignation, effective in two weeks, but he still has an outstanding loan balance.
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Can You Make Extra Payments on a 401(k) Loan to Pay It off Faster?

DWC 05/29/18
Facts A participant in our 401(k) plan took out a loan a couple years ago. She could only afford to make the bare minimum payments at the time, but is now in a financial position to pay down the loan more quickly.
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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.