CARES Act and 403(b) Retirement Savings Plans
The new federal Coronavirus Aid, Relief, and Economic Security (“CARES) Act provides opportunities for individuals and families whose finances were adversely impacted by COVID-19 to take distributions and loans from their retirement savings plan balances.
An “eligible participant” is a plan participant who has experienced adverse financial consequences due to COVID-19 as defined in the CARES Act: The Act defines an eligible participant as follows:
- The participant is diagnosed with COVID-19, or
- a spouse or dependent is diagnosed with COVID-19, or
- the participant experiences adverse financial consequences due to quarantine, furlough, lay off, or having work hours reduced due to the virus; being unable to work due to lack of child care due to the virus; or closing or reducing hours of a business owned or operated by the individual due to the virus, or
- other factors as determined by the Secretary of Treasury.
Employees participating in a 403(b) retirement savings plan should contact Shekethia Ryan-Williams at firstname.lastname@example.org for more information.
NOTE: Taking an early distribution or loan from your retirement plan has significant long-term implications for your retirement savings. While these options are available for those who may need them, you should carefully consider the long-term ramifications before doing so.