The Enhanced Loan Provision for Qualified Participants
By Fred Reish, Bruce Ashton and Betsy Olson
With the spread of the coronavirus and the resulting closures and cutbacks, many 401(k) participants are working reduced hours, but are not considered to be terminated for purposes of ERISA. Furloughs and similar required leaves are common for businesses whose employees interact directly with retail customers, such as restaurants, stores, and gyms.
Many of those employees do not have high incomes or significant savings. As a result, they are likely facing financial crises, including possible eviction, loss of credit, and inability to purchase necessities. Employers, in their roles as plan sponsors, may be able to help those participants.
Continue reading The CARES Act: Helping Your 401(K) Participants During the Coronavirus Crisis