Frequently Asked Questions
If the plan has decided to make coronavirus-related loans available, participant eligibility requirements are as follows.
Participants who are diagnosed with COVID-19 via a CDC-approved test, or who have a spouse or dependent child diagnosed with COVID-19; or participants who experience adverse financial consequences as a result of the virus due to:
- 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
The plan must allow loans, must have opted to make coronavirus-related loans available, and participants must meet a coronavirus-related eligibility requirement. For these participants:
- The eligible maximum loan limits have increased from $50,000 or 50% of vested account balances to $100,000 or all of the vested account balance. Collateralized loan limits will be lower because of the need to hold 110% collateral on those loans.
- Any coronavirus-related loans must be initiated between March 27 and September 23, 2020.
- The number of loans allowed and the amount participants may borrow are not impacted by the CARES Act. They remain the same as what is already stated in the plan document.
- Any participant repaying an existing retirement plan loan as of the CARES Act effective date of March 27, 2020, through December 31, 2020, may elect to suspend payments for up to one year.