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Coronavirus Distributions from Workplace Retirement Plans

Relief may be available for employees impacted by Covid-19. The Coronavirus Aid, Relief, and Economic Security (CARES) Act[i] was signed into law on March 27, 2020. For a short period of time, the Act allows participants affected by the Coronavirus to access funds in their retirement plan accounts through special withdrawal and loan provisions.

The provisions in the CARES Act may be adopted by plan sponsors immediately. Plan sponsors that offer the new provisions within their plan design have until the end of 2022 to complete a plan amendment.  Please keep in mind that the new provisions are not required to be offered. Plan sponsors with questions on how the provisions would work in their plan should reach out to us.

Coronavirus Related Distributions (CRDs) and Coronavirus Loan Relief may be offered by plan sponsors to qualified participants if:

  • They were diagnosed with COVID-19 by a test approved by the Centers for Disease Control and Prevention;
  • Their spouse, or another dependent was diagnosed; or
  • Have suffered financial consequences due to being quarantined, job loss, furlough, reduction in hours, inability to work due to lack of child care, or loss of business.

The maximum CRD amount is $100,000 and includes all combined retirement plans and IRAs that a participant may choose to draw from.  Participants will not be subject to an early withdrawal penalty, and the distribution can be taxed over a 3 year period.  Plan sponsors can rely on a participant’s self-certification that they qualify for the distribution. 

Coronavirus relief loans can be taken until September 23, 2020. Qualified participants are permitted to take loans of up to $100,000 or 100% of their vested account balance, whichever is less.  Loan payments that are scheduled to occur between March 27 and December 31, 2020 may be deferred for up to one year for both the coronavirus loans and any existing loans.


[i] U.S. Congress, Senate, CARES Act, S.3548, 116th Cong., introduced March 19, 2020, (Source)

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