What options exist for participants who do not fall into the “qualified individual” category as defined by the CARES Act?
Outside of the hardship withdrawal, in-service distributions and loan provisions may be of help. Plan sponsors may consider adding other permitted in-service withdrawal qualifications to provide more flexibility to participants. For example, a plan may allow participants to withdraw employer contributions that have been in the plan for at least two years or after the individual has been a participant for at least five years. It’s important to point out that once added, those withdrawal rights are generally protected benefits, so plan sponsors may want to carefully consider the expansion of withdrawal rights.
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.