The CARES Act: How Employers Have Reacted
In reaction to the coronavirus pandemic that has swept the globe, lawmakers passed the Coronavirus Aid, Relief, and Economic Security (CARES) Act. Notably, it contained measures that eased many retirement plan administration rules for plan sponsors and their employees. A recent report from Fidelity provides insight on how retirement plan sponsors have reacted to the optional changes the CARES Act allows them to make to their plans. The report notes the following:
- Most (63 percent) plan sponsors are maintaining their current match program, while only 8 percent have suspended or reduced the match.
- Nearly all (97 percent) plan sponsors have opted to adopt the CARES Act distribution provisions.
- More than half (54 percent) have enabled loan deferments under the CARES Act.
- About half (49 percent) of plans able to offer new loans under the CARES Act have enabled the provision.
Have you and your firm discussed whether you will adopt the CARES Act provisions? If you’re uncertain, schedule a call with your retirement plan service provider, third-party administrator, or plan advisor.