If a retirement plan adopts the relaxed loan provisions available under the CARES Act, must it also adopt the coronavirus-related distribution provisions?

No, the plan may adopt the loan-related provisions without adopting the coronavirus-related distributions under the Act.

On May 4, the IRS in tis FAQs confirmed that “It is optional for employers to adopt the distribution and loan rules of section 2202 of the CARES Act. An employer is permitted to choose whether, and to what extent, to amend its plan to provide for coronavirus-related distributions and/or loans that satisfy the provisions of section 2202 of the CARES Act” (see Q.9 of the IRS FAQ).

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Cetera Retirement Plan Specialists is a third-party administrator and may not offer tax, legal or investment advice. Plan sponsors should consult their own tax, legal or investment professionals.