Some of the rules around retirement plans, including 401(k) plans, have also changed as a result of the CARES Act. If you are enrolled in a 401(k) through Republic’s provider, Vanguard, we have adopted the following changes:
- Allows affected individuals* to take a coronavirus-related distribution of up to $100,000 from their 401(k) or IRA during the 2020 calendar year without the 10% early distribution penalty.
- Doubles the current retirement plan loan limits for affected individuals* to the lesser of $100,000 or 100% of their vested account balance for loans taken from March 27, 2020 to September 23, 2020.
- Allows affected individuals* to delay retirement plan loan repayments otherwise due for the rest of 2020 by one year and re-amortize payments.
- Suspends the required minimum distributions that participants must take from tax-deferred 401(k) plans and IRAs starting at either age 70½ or 72 for the rest of 2020.
These options can be requested immediately through our 401(k) provider, Vanguard. For more information or to get started, read this update from Vanguard. If you’re enrolled in a union 401(k) plan, please contact your plan administrator to find out which changes may apply to your plan.
*Affected Individual is defined as a participant: (1) who is diagnosed with COVID-19; (2) whose spouse or dependent is diagnosed with COVID-19; or (3) who as a result of the virus, experiences adverse financial consequences from being quarantined, furloughed, or laid-off; having reduced work hours; being unable to work due to lack of childcare; having to close or reduce hours of a business owned or operated by the individual, or “other factors” to be determined by the Secretary of Treasury.