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 ability to receive a coronavirus-related withdrawal expired on 9/22/20. Prior to that time the CARES Act gave 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.
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. TIAA will use similar self-certification language as provided in IRS Notice 2020-50.
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:
- The individual having a reduction in pay (or self-employment income) due to COVID-19 or having a job offer rescinded or start date for a job delayed due to COVID-19;
- The individual’s spouse or a member of the individual’s household (as defined below) being quarantined, being furloughed or laid off, or having work hours reduced due to COVID-19, being unable to work due to lack of child care due to COVID-19, having a reduction in pay (or self-employment income) due to COVID-19, or having a job offer rescinded or start date for a job delayed due to COVID-19; or
- Closing or reducing hours of a business owned or operated by the individual’s spouse or a member of the individual’s household due to COVID-19.
- Other factors as determined by the Secretary of the Treasury or his delegate.
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 are 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, or prior to the in-service distribution age selected under the terms of the plan.
On May 19, TIAA began to offer coronavirus-related distributions (CRDs) to money purchase plans. Generally, these CRDs are available to terminated employees and active employees that meet the in-service requirements of the plan.
IRS Notice 2020-50 confirms that money purchase plans are not permitted to make a CRD distribution before an otherwise permitted distributable event.
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. These recontributions will be treated as rollovers. While plans are not required to accept rollover contributions, the IRS "anticipates" that plans that generally accept rollover contributions would accept recontributions of coronavirus-related withdrawals.
While this was possible before 9/22/20, the increase on loan limits expired on 9/22/20. Before that time, participants in plans that opted to make coronavirus-related distributions available could obtain up to $200,000 through coronavirus-related withdrawals and loans, provided the individual had the funds available to support both activities and met the eligibility conditions for a coronavirus-related distribution. This could, however, dramatically impact retirement savings.