CARES Act & CalSavers

My hope is that you and your families are healthy and finding constructive ways to deal with the “shelter in place” that is now the reality of how we are living. It has been two weeks in California; I now realize more than ever how much I enjoy and miss the time that we all spend together. Let’s hope that this ends soon and that everyone comes out with minimal impact on their lives.

I am sure you have seen news about recent legislation affecting retirement plans. Below is a summary of the key provisions that are related to retirement plans.


Minimum Required Distributions:

The CARES Act temporarily waives the required minimum distribution rules for 2020 with respect to certain defined contribution plans and IRAs.

Coronavirus-Related Distributions:

Individuals may take coronavirus-related distributions from qualified retirement plans of up to $100,000 without such distributions being subject to the 10% early distribution tax. Such distributions are subject to federal income taxation, which may be ratably spread over the three taxable year period beginning with 2020. An individual who takes a coronavirus-related distribution may repay the distribution to an eligible retirement plan during the three-year period beginning on the day after the date of the distribution. Repayments within the three-year period will result in the distribution not being subject to federal income taxation, or in the case that the income tax has already been paid, permit the individual to receive a refund of the previously paid federal income tax. An individual must satisfy certain requirements in order to qualify for coronavirus-related distributions.

Enhanced Participant Loans:

A participant who qualifies for coronavirus-related distributions is permitted to take loans of up to the lesser of (1) $100,000 (increased from $50,000) or (2) 100% (increased from 50%) of the participant’s vested account balance. In addition, loans from qualified retirement plans with respect to participants who qualify for coronavirus-related distributions are subject to participant loan delayed repayment relief. This relief provides that any due date for a participant loan repayment that occurs during the period beginning March 27, 2020, and ending December 31, 2020, shall be delayed for one year.

Funding Relief for Defined Benefit Plans:

Any required minimum contributions for a single employer defined benefit that are due during the 2020 calendar year are not required to be made until January 1, 2021, with accrued interest from the original payment due date to the actual payment date. Additionally, plan sponsors of defined benefit plans may treat the last plan year’s adjusted funded target attainment percentage as the percentage applicable to plan years which include the 2020 calendar year for purposes of applying the funding-based limitation on shutdown benefits and other unpredictable contingent event benefits.


This is a Note sent to us from one of the investment vendors servicing the 401k Market.not changing.  However, they said that if an Employer has an “extenuating circumstance” such as no longer in business or temporarily closed, the Employer can call the CalSaver’s hotline ((855) 650 – 6916) and inform them of this.  At that point CalSavers will “note the file” and encourage that the Employer sign up as soon as they are able