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How Have Plan Sponsors and Participants Responded to COVID-19?


During a period of unprecedented economic turmoil and uncertainty, a new survey by the Plan Sponsor Council of America offers insights on the response of plan sponsors and participants to the new options.

The snapshot survey of some 137 plan sponsors offered an updated look at the adoption rates of special withdrawal and enhanced participant loan access included in the CARES Act. The PSCA had conducted a similar snapshot in early April to assess plan sponsor intentions with regard to adopting the new optional provisions, and their thoughts regarding the possibility of suspending employer contributions.

Two months later, the survey, fielded between June 2 and June 16, found that the vast majority of employers have not moved to suspend their contributions. Moreover, no responding organizations indicated that they are currently considering terminating the plan as a result of the ongoing pandemic and economic conditions, and more than 90% of respondent organizations are making no changes to employer contributions at this time. 

That said, 5% of respondents have suspended matching contributions and fewer than 1% have suspended non-matching (profit-sharing) contributions. Larger organizations were somewhat more likely to have suspended the match. Another 3% are considering reducing or suspending contributions but have not made a decision at this time. 

CARES Act Adoptions

Almost three months after the passage of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, most plan sponsors have implemented at least one of the optional expanded loan or withdrawal provisions designed to help relieve the economic impact felt by participants as a result of the COVID-19 pandemic. 

Nearly two-thirds (63.5%) of respondent plans are allowing participants to take Coronavirus-Related Distributions (CRDs). 

Only a third (36.5%) of respondents increased plan loan amounts to the lesser of $100,000 or 100% of the vested account (versus previous limits of $50,000 or 50% of the vested account). 

One-in-five plan sponsors (19.7%) are still taking a wait-and-see approach, and fewer than 10% of employers have already determined they will not implement any of the optional CARES Act provisions. 

Participant Response 

While the majority of plans have adopted the expanded access provisions of the CARES Act, few participants have taken advantage as of early June. 

Among plans offering a CRD, nearly 40% say an average of just 1%-5% of participants have taken one, though nearly as many say that fewer than 1% of participants have done so, and 18.4% report that no participants have.

Among plans that have increased the loan limits, most report that fewer than 1% of participants have taken advantage of this option, and more than a quarter state that none have. 

Nearly 70% of organizations stated that plan loan activity throughout the last few months is about the same as usual (whether they implemented CARES Act loan provisions or not), with only 13.4% noting an increase and 10.9% actually noting a decrease. 

In fact, half of respondents are currently communicating the impact of plan loans and distributions on retirement savings to participants—a third (32.4%) already have and 17.6% are currently creating the communications.

The full report is available at