The CARES Act allows employees to take loans and distributions from the plan that would not have been allowed under normal circumstances. Due to these changes, the Recordkeepers are preparing to receive an extremely high volume of calls and communications from Plan Participants to request such distributions from Retirement Plans.
Due to this expected volume, some Recordkeepers are defaulting all plans to permit these expanded distribution and loan options,
unless you (the Plan Sponsor) opt out.
The increased loan availability only affects plans that already offer participant loans.
In many of the communications we have seen thus far from Recordkeepers, there is a very tight turnaround to opt-out of these expanded loan and distribution options. In many cases, the response is required just a day or two from the day the e-mail arrives in your inbox.
We recommend going through Recordkeeper e-mails from last week that you may have deleted.
At any time, especially now, if you have questions regarding these communications, the CARES Act, or anything else regarding your Plan, please contact your plan consultant at PASI.