• More than 60% of large organizations are suspending loan repayments due on or before Dec. 31, 2020 and deferring repayment for up to a year, versus only one-in-five (20.7%) of small organizations.
• Overall, about one-in-ten (9.2%) employers aren’t planning to adopt any of these new options, though that is the case at only 2.1% of large organizations, the survey found.
According to the survey, other plan changes employers are making in response to the COVID-19 pandemic include:
• Changes to loan provisions including repayment after termination.
• Allowing loans during leaves of absence.
• Increasing the number of loans allowed.
• Changing timing of employer contributions from per-pay-period to annual and making a year-end true-up contribution.
While the full impact of the COVID-19 pandemic is not yet known, 76.5% of plan sponsor respondents are not currently contemplating changes to their current plan designs as a result. More than 90% of small organizations reported they will be making no changes.
As noted above, the CARES Act and its provisions are just two weeks old. Employers with retirement plans, as well as their advisors and service providers, are still dealing with an enormous array of complex and sensitive human resource policy, employment, compensation and benefit issues.
PSCA, in conjunction with the American Retirement Association, has developed a list of resources regarding the impact of the coronavirus on retirement plans.