On Sunday December 27, 2020, President Trump signed the COVID relief package into law containing countless provisions addressing both pandemic relief and general funding for the federal government. The legislation does not include very many substantive provisions impacting the retirement provider community. While some industry observers had anticipated the possibility of Congress extending the pandemic-related retirement relief provisions originally ushered in under the CARES Act, the recent legislation did not provide any such extensions. Instead, the legislation contains a provision extending similar retirement relief to other federally declared, non-pandemic disasters. This retirement relief, for federally declared, non-pandemic disasters, closely mirrors the relief provided under the CARES Act (penalty-free withdrawals, 3-year repayment options, increased plan loan limits and suspension of loan repayments) for individuals impacted by other disasters.
In addition to providing retirement relief for other federally-declared, non-pandemic disasters, the recent legislation contains technical corrections designed to clarify CARES Act relief for Money Purchase Pension Plans, and relief designed to enable plan sponsors who have experienced a reduction in workforce to avoid, at least in some circumstances, having the workforce reduction trigger a partial plan termination.