Industry Insights

CARES Act: The Major Provisions That Affect Your Retirement Plan


The CARES Act legislation provides temporary financial relief to both the business and the employees affected by the Coronavirus.  Most of the provisions apply to 401(k), 403(b), IRA and Governmental 457(b) plans.  It is important to note that the provisions are optional, and Plan Sponsors reserve the right to not make any amendments, with the exception to the RMD provision.  Trinity is here as your partner and we will remain focused on the importance of long-term savings.


  • The participant has been diagnosed with a coronavirus (COVID-19 or SARS-CoV-2)
  • The participant’s spouse or dependent has been diagnosed with a coronavirus illness; or
  • The participant has suffered financially from the pandemic because:
    • The participant was laid off, furloughed, quarantined, or had hours reduced;
    • The participant cannot work due to the unavailability of childcare because of the pandemic; or
    • The participant’s own business has had to close or reduce hours


  • Defined Benefit Plan Provisions
    • Delays defined benefit contribution requirements
    • Extension of second six-year remedial amendment cycle
  • Plan Amendments
    • Additional time is provided to amend plan provisions
    • Plan Sponsors have until the last day of the plan year beginning in 2022
  • Withdrawal Provisions
    • The 10% penalty on early withdrawals is waived for coronavirus-related distributions made between 1/1/20 and 12/31/20
    • Coronavirus-related distributions are not subject to the 20% mandatory tax withholding and are permitted up to $100,000
    • Ordinary income tax will be paid ratably over a three-year period (1/3 each year) beginning with tax year 2020
  • Loan Provisions
    • The loan limit increased from $50,000 to $100,000 for loans processed between 3/27/20 and 9/23/20
    • Any repayment of an existing loan due between 3/27/20 and 12/31/20 may be delayed for one year
  • RMD Provisions
    • RMDs for DC plans in 2020 are now optional and if already taken, can be rolled into an IRA if done within 60 days
    • All Plan Sponsors will need to amend the Plan Document to reflect the waiver, regardless of participant activity


Each provision is optional, temporary and applies to only those directly affected by the virus as outlined above. Please allow Trinity to work with you so you can make the absolute best decision possible for your plan. 
If you have any questions about what the CARES Act entails for you, please contact your dedicated Relationship Manger or Regional Vice President – Retirement Sales.