Adminstrative information on coronavirus-related loans
Frequently Asked Questions
If plan participants have questions about taking RMDs, loans or withdrawals, remember to remind them that it’s best to speak with their financial advisor and/or tax consultant before making any decisions. While we understand the need to provide access for those who have no other options, taking a withdrawal or loan can be detrimental to long-term retirement savings if not paid back. TIAA remains committed to helping plan participants achieve long-term retirement readiness while ensuring their financial wellness in this time of uncertainty.
The CARES Act gives plan sponsors the option to decide whether or not to make coronavirus-related withdrawals and loans available to their participants. Many retirement plan providers, including TIAA, gave sponsors a specific time frame in which to notify them if they did not want to make the expanded loans and withdrawals available. Otherwise, the options were made available and will require sponsors to make plan amendments within the next 2-4 years, depending on the type of plan(s) offered.
Yes, but the amendment does not need to be made immediately.
- For plans other than governmental plans, amendments for the CARES Act provisions are due on the last day of the plan year beginning in 2022.
- Governmental plan amendments for the CARES Act provisions are due on the last day of the plan year beginning in 2024.
For plan sponsors who use TIAA’s plan document, also known as a “volume submitter” or “IRS pre-approved” plan document, TIAA will provide a CARES Act amendment on behalf of the plans that are opted in. Plan sponsors who do not use the TIAA plan document should work with their legal counsel for guidance.
Participants in plans that have opted to make coronavirus-related loans available can request a coronavirus-related loan online or through the call center.
When requesting a coronavirus-related loan, participants in plans that have opted to make coronavirus-related loans available will be asked to self-certify that they meet an eligibility requirement. This can be done online or on a recorded line. TIAA will use similar self-certification language as provided in IRS Notice 2020-50.
Spousal consent is still applicable for loans and distributions. TIAA is supporting a remote notary option (www.Notarize.com/TIAA ), and participants are directed to use this approach.
Retirement plan rules will continue to determine how many loans a participant can have at one time.
Depending on the employer’s plan rules, the participant may be allowed to continue making payments after leaving the job or may be required to repay the outstanding loan in a lump sum.
Existing loan payments may be suspended for one year. Participants should log in to their accounts, go to Loan Summary and then Loan Details to suspend their loan. If they have multiple loans, they will have to take these steps for each repayment they wish to suspend.
Yes. Participants in plans that have opted to make coronavirus-related distributions available could obtain up to $200,000 through coronavirus-related withdrawals and loans, provided the participant has the funds available to support both activities and meets the eligibility conditions for a coronavirus-related distribution. This could, however, dramatically impact retirement savings.
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