[UPDATED 4/8/20]
The four national service providers have joined with other firms in helping their clients adopt the new retirement relief provisions under the Coronavirus Aid, Relief, and Economic Security (CARES) Act.
MassMutual
MassMutual announced that it is implementing new provisions available under the CARES Act beginning this week. More specifically, retirement plan sponsors can opt in to offer employees enrolled in a MassMutual retirement plan:
- a suspension of required minimum distributions for 2020;
- a temporary increase of up to $100,000 for loans and an extension of up to one year for loan repayment; and
- a penalty-free COVID-19-related distribution capped at $100,000 with no mandatory tax withholding requirements and the ability to repay distributions.
MassMutual also indicated that, until further notice, it is waiving fees associated with eligible retirement plan hardship distributions, loan initiations and withdrawals under the CARES Act. The firm will also continue to pay third-party administrators’ portions of these fees.
“We understand that challenging times compel some individuals to consider tapping retirement savings to meet their immediate needs and these new provisions will be helpful,” stated Teresa Hassara, head of workplace solutions at MassMutual. “That said, before anyone dips into their retirement savings, it could be beneficial to speak with the plan provider, a financial professional or employer to help weigh options and make a thoughtful decision.”
The Principal and Wells Fargo
The Principal Financial Group is also moving forward on changes to support individuals and businesses experiencing the financial impacts of the COVID-19 outbreak. Building on the passage of the CARES Act, Principal and Wells Fargo Institutional Retirement & Trust (IRT) are waiving participant-paid distribution and loan origination fees for participants taking tax-favored withdrawals, hardship withdrawals or loans from their employer-sponsored retirement accounts.
Additionally, retirement plan sponsors for plans drafted and maintained by Principal and Wells Fargo IRT will have fees waived for plan amendment changes to allow participants to access these programs or who need to reduce or remove their employer contributions. Principal also announced relief to support its insurance and benefits customers.
“The CARES Act is an important bridge to help those most affected today by the spread of COVID-19. We’re making the changes needed on our side to ensure plan sponsors and participants aren’t hit with additional costs to access these lifelines,” said Renee Schaaf, president of Retirement and Income Solutions. “We remain focused on supporting our customers with the information, service, and flexibility they need.”
Transamerica
Transamerica announced that effective April 7 it will waive all coronavirus-impacted withdrawal fees within retirement plans as part of its CARES Act Customer Support Initiative.
Transamerica notes that it recognizes that these new rules and regulations are complex for plan sponsors as well as their participants, who may need help with extra expenses due to the pandemic. Under the initiative, Transamerica announced that, among other things, it will:
- waive all retirement plan fees associated with coronavirus-related distributions until further notice.
- not charge any plan amendment fees needed to implement the new CARES Act provisions for those retirement plan sponsors who use Transamerica’s pre-approved document.
- establish a dedicated team to support participants who are considering accessing their long-term retirement savings to address challenges related to the coronavirus.
“Employers can give their coronavirus-impacted employees the peace of mind to know that if they need the funds, the money is available,” notes Blake Bostwick, CEO for Transamerica’s Workplace Solutions division. “We know that Americans have worked very hard to build up their retirement savings, and we also understand that our retirement plan participants may access these retirement funds as a last resort. We want to help Americans keep their retirement readiness strong when we emerge from this difficult period.”
OneAmerica
Joining other firms in showing support to its retirement plan participants during this unprecedented crisis, OneAmerica announced April 7 that it also is immediately waiving fees for all hardship withdrawals, including those distributions related to COVID-19.
Under the firm’s decision, administrative fees for hardship and COVID-19 related distributions will be eliminated effective April 7, 2020 through Dec. 31, 2020.
In addition, OneAmerica will automatically implement the COVID-19 distribution option for all plans that currently allow hardship withdrawals and has provided an opt-out for those plan that do not wish to offer the provision. The firm is also working with plan sponsors that do not currently offer hardship withdrawals, but would like to begin offering the provision.
“At OneAmerica, we recognize that this is a time of uncertainty for many of our participants,” stated Sandy McCarthy, president of retirement services at OneAmerica. “We’re hopeful that this gesture will help to ease some of the burden.”
