The COVID-19 outbreak is disrupting the lives of families and the operations of businesses across the country. The impact on the economy and financial implications for Americans will certainly be substantial. At times like this, NAIFA’s advocacy influence and role as the voice of insurance and financial professionals is more important than ever. We are working on behalf of our members, the entire agent-advisor community, and Main Street USA consumers to help Congress find ways to lessen the impact of the outbreak.
NAIFA is asking Congress to relax retirement plan rules to help American workers and businesses cope with the financial strain being caused by the COVID-19 outbreak. We have sent a letter, along with other organizations representing retirement plan sponsors and service providers, plan participants, and retirees, to every member of Congress urging legislation to relieve some financial burdens for employers providing retirement plans and give plan participants greater flexibility to access their savings without incurring penalties.
For individuals, NAIFA is asking Congress to waive the 10% penalty for early withdrawals from retirement plans for people impacted by the COVID-19 pandemic and give them up to three years to pay early distributions back into their accounts. NAIFA is also asking Congress to increase the maximum loan a participant can take from a retirement account to $100,000 from the present limit of $50,000. Congress should also allow those who have already taken retirement plan loans to delay repayments by up to one year.
Due to the COVID-19’s impact on stock values, Congress should waive minimum distribution rules for calendar year 2020 to allow the market time to recover some of the recent weeks’ losses.
For plan sponsors, NAIFA urges Congress to extend tax filing deadlines as well as deadlines for employee benefit filings with the IRS, Department of Labor, and Pension Benefit Guarantee Corporation (PBGC). NAIFA also urges an extension of PBGC premium payment deadlines.
Congress should also reduce the impact of minimum required contributions by stabilizing contribution levels and extending contribution deadlines. This would free up money that employers may need to pay their employees and cover other business expenses.
As the COVID-19 pandemic runs its course, NAIFA will continue its advocacy efforts, looking out for your interests and those of your clients. We continue working with state and federal lawmakers and executive-branch policymakers to reduce the COVID-19 outbreak’s impact.