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 execute 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.
No. Coronavirus-related withdrawals are separate and distinct from hardship withdrawals.
Participants in plans that have decided to make coronavirus-related withdrawals available can request a coronavirus-related withdrawal online or through the call center.
Participants in plans that have opted to make coronavirus-related withdrawals available will be asked to self-certify that they meet an eligibility requirement. This can be done online or on a recorded line.
For participants in plans that have opted to make coronavirus-related withdrawals available, being diagnosed with COVID-19 through a test approved by the CDC is just one of the ways they can become eligible. Others are:
- A spouse or dependent is diagnosed with COVID-19 through a test approved by the CDC
- The participant experiences adverse financial consequences as a result of:
- Being quarantined
- Being furloughed, laid off, or having work hours reduced as a result of the virus or disease
- Being unable to work due to lack of child care due to such virus or disease
- Closing or reducing hours of a business owned by such individual as a result of such virus or disease
- Other factors as determined by the Secretary of the Treasury or his delegate
Spousal consent is still applicable for loans and distributions. TIAA is supporting a remote notary option, and participants are directed to use this approach.
No. TIAA Traditional accounts in RA/GRA/RC contracts are not eligible for coronavirus-related distributions due to existing contractual provisions in these contracts. Some Transfer Payout Annuity (TPA) contracts may be eligible for a TPA advance following normal procedures.
Coronavirus-related withdrawals can be made available to money purchase plans at the direction of the plan sponsor and subject to an important legal restriction. The restriction is that withdrawals from a money purchase plan cannot be made available to in-service participants generally under the age of 59½.
TIAA is working to distinguish applicants by age and will begin to offer coronavirus-related withdrawals to money purchase plans when that capability is in effect.
The act allows participants to recontribute within three years regardless of that year’s contribution limit. This will make it easier for them to replace the distribution amount in their retirement account.
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.