Log in

Can I Convert a Coronavirus-Related Distribution to a Roth IRA?

DWC 02/25/21
Facts We added Coronavirus-Related Distributions (CRDs) to our 401(k) plan in 2020, and a number of our participants availed themselves of the new feature. I know they have the option to pay any applicable taxes all at once or spread them over three years, and I also understand they have up to three years to roll the money over to avoid taxes ...
Read More

Can a Former Employee Roll a Coronavirus-Related Distribution Back into our Plan?

DWC 09/15/20
Facts Earlier this year, we decided to make the CARES Act coronavirus-related distributions (CRDs) available to participant in our 401(k) plan. We know that it is possible for participants to repay CRDs, but we didn’t anticipate any would be interested in that option. We’re glad that some do now want to repay, but we want to be sure we handle ...
Read More

How Can I Minimize my Risk When Reviewing and Approving Hardship Withdrawals?

DWC 08/25/20
Facts As a plan sponsor, I want my employees to have access to their retirement accounts in the event of a financial emergency. I know that offering hardship withdrawals could satisfy that goal, but after doing some reading, I’m a little nervous about the risk associated with reviewing and approving these types of requests. Not only that, but I ...
Read More

Do We Have to Provide New Paperwork When a Participant Requests a Second Distribution?

DWC 06/16/20
Facts When a participant requests a distribution from our plan, I provide them with a with a package that includes an election form and a bunch of other information. A participant who terminated and took a distribution last year received an additional company contribution and, as a result, has additional money in her account and is asking for a ...
Read More

Should We Make Up for Earnings Lost as a Result of a Delayed Distribution?

DWC 05/19/20
Facts Over the past several months, our turnaround times for normal business processes have lagged somewhat as we have adjusted operations in response to the various stay-at-home orders. When participants in my 401(k) plan request distributions, I usually make them a priority and forward them along for processing by the next day at the latest. ...
Read More

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.
Read More

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.
Read More

Can We Allow a Distribution for a Coronavirus-Related Hardship?

DWC 03/31/20
Facts Some of our employees are dealing with financial challenges due to the coronavirus situation, and they are asking whether they can access their 401(k) accounts. Our plan allows for loans and for in-service distributions at age 59 ½, but some of these employees are younger than that. As a plan sponsor, I’ve always felt strongly that our ...
Read More

Do We Still Need to Suspend Deferrals Following a Hardship Distribution?

DWC 02/25/20
Facts Larry and Kent are both participants in our company’s 401(k) plan. Both recently went back to school on a part-time basis to pursue graduate degrees and will continue working for us. Each of them took hardship distributions to help pay for tuition, Larry on September 18, 2019, and Kent on January 3, 2020. Both of them would like to resume ...
Read More

Do We Need to Continue Paying RMDs for a Deceased Participant?

DWC 02/18/20
Facts The CEO (and 5% owner) of our company passed away earlier this year at the age of 73. He started taking his required minimum distributions right on time after reaching age 70 ½. At the time of his passing, he was not married and had no children. He also had not designated a beneficiary under the plan.
Read More

Categories

See all

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.