Recordkeeper Communications Regarding the CARES Act

What Opt-In/Out Means for your Retirement Plan

A message to Plan Sponsors:

Once again, we hope you, your families, and your employees and their families are continuing to be safe and well.

The following includes information regarding Recordkeeper communications. Please read below for important information regarding this communications.

Executive Summary

Your Plan’s investment provider (“Recordkeeper”) is likely sending you critical, time-sensitive e-mails regarding the CARES Act. Please make sure you read those e-mails closely, especially if they reference the CARES Act.

Recordkeepers are making attempts to organize quickly in light of the CARES Act and loosened restrictions on retirement plans. If you have not already received a communication from your Recordkeeper, it is very likely that you will in the coming week.

Within that communication (e-mail), you will be asked by the Recordkeeper to make an important decision regarding your Retirement Plan. It is very important that you open and read the contents of that e-mail communication as soon as you receive it.

Background

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.

Note: 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.

We are open, we are available, and we are ready to answer your questions.

Be safe and be well.

PASI is here for you.