The economic and societal lockdowns that have been imposed in an attempt to slow the spread of the coronavirus have presented unique challenges, including some that may not have been contemplated when the lockdowns were instituted. Congress was quick to pass the CARES Act , which gave retirement plan participants greater access to their plan balances through expanded loan and hardship distribution provisions. However, a stumbling block quickly became apparent when plan provisions required spousal consent for some distributions or loans. Spousal consent waivers for plans subject to qualified joint and survivor annuity provisions of Section 417 of the Internal Revenue Code generally must be witnessed in the physical presence of a plan representative or a notary public. Similarly, the same spousal consent and witnessing requirements apply to designate a non-spouse beneficiary for a 401(k) or ERISA-covered 403(b) plan. Physical presence can be difficult to achieve in light of stay-at-home...

As described in our previous article on participant notices, plan sponsors of qualified retirement plans must routinely provide various notices to participants and beneficiaries regarding plan provisions, investment information, fees and more.  On May 21, the U.S. Department of Labor released new regulations regarding the electronic disclosure of these notices, ushering in an era of convenience for a historically arduous requirement. Electronic delivery rules have existed for years, but abiding by them has been prohibitive, particularly when delivering to employees not using a computer as an integral part of work duties. The new rules do not replace the existing ones, but instead offer a more feasible alternative to them. In short, the new safe harbor framework allows sponsors to provide required notices directly via email or to make them available on the internet under certain requisite conditions. The process can be applied for participants who have provided an email address or ...

As described in our previous article on participant notices, plan sponsors of qualified retirement plans must routinely provide various notices to participants and beneficiaries regarding plan provisions, investment information, fees and more.  On May 21, the U.S. Department of Labor released new regulations regarding the electronic disclosure of these notices, ushering in an era of convenience for a historically arduous requirement. Electronic delivery rules have existed for years, but abiding by them has been prohibitive, particularly when delivering to employees not using a computer as an integral part of work duties. The new rules do not replace the existing ones, but instead offer a more feasible alternative to them. In short, the new safe harbor framework allows sponsors to provide required notices directly via email or to make them available on the internet under certain requisite conditions. The process can be applied for participants who have provided an email address or ...

The Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law on March 27. Under the Act, participants affected by the coronavirus may be able to take distributions in 2020 of up to $100,000 from an employer-sponsored retirement plan or an IRA. Although allowing these distributions from a qualified retirement plan is optional, we have seen that a number of employers have chosen to amend their plans to permit such distributions. The Act provides that coronavirus-related distributions will not be subject to the mandatory 20% withholding nor the 10% early withdrawal penalty (for those younger than 59½) that would otherwise apply. In addition, participants have the option to return some or all of the funds to the plan or IRA if done so within three years, thus avoiding taxation on these amounts. To the extent funds are not redeposited within the three-year period, such amounts will be subject to ordinary income tax. The income tax due on the distribution will be spread ...

The Coronavirus Aid, Relief and Economic Security (CARES) Act was signed into law on March 27. Under the Act, participants affected by the coronavirus may be able to take distributions in 2020 of up to $100,000 from an employer-sponsored retirement plan or an IRA. Although allowing these distributions from a qualified retirement plan is optional, we have seen that a number of employers have chosen to amend their plans to permit such distributions. The Act provides that coronavirus-related distributions will not be subject to the mandatory 20% withholding nor the 10% early withdrawal penalty (for those younger than 59½) that would otherwise apply. In addition, participants have the option to return some or all of the funds to the plan or IRA if done so within three years, thus avoiding taxation on these amounts. To the extent funds are not redeposited within the three-year period, such amounts will be subject to ordinary income tax. The income tax due on the distribution will be spread ...

Investors are understandably concerned about the drop in value of their holdings as the first pandemic in many generations redefined our lives, seemingly overnight. HBS believes that investment processes, grounded in understanding the financial markets and the economy, provide the antidote for impulsive investment decisions. In The Wealth of Nations, a definitive examination of the practical and moral aspects of a market economy in the pre-industrial age, Scottish economist Adam Smith coined the term invisible hand as a guiding principle. Mr. Smith’s explanation of free-market economics in 18th century Great Britain centered on the belief that market participants always act in their own interest. A marketplace of sellers and buyers making voluntary transactions unleashes powerful economic forces — the invisible hand. In mid-February, approaching the 11th anniversary of the record-long bull market and primarily focused on maximizing returns, investors began to deal with the reality of t...

Investors are understandably concerned about the drop in value of their holdings as the first pandemic in many generations redefined our lives, seemingly overnight. HBS believes that investment processes, grounded in understanding the financial markets and the economy, provide the antidote for impulsive investment decisions. In The Wealth of Nations, a definitive examination of the practical and moral aspects of a market economy in the pre-industrial age, Scottish economist Adam Smith coined the term invisible hand as a guiding principle. Mr. Smith’s explanation of free-market economics in 18th century Great Britain centered on the belief that market participants always act in their own interest. A marketplace of sellers and buyers making voluntary transactions unleashes powerful economic forces — the invisible hand. In mid-February, approaching the 11th anniversary of the record-long bull market and primarily focused on maximizing returns, investors began to deal with the reality of t...