New COVID Relief Bill Has Retirement Provisions
There’s some great news for plan sponsors in the COVID relief bill – a “temporary rule preventing partial plan termination.”
The legislative text in the massive (nearly 5,600-page) bill includes in Division EE Section 209 a “temporary rule preventing partial plan termination.” The provision, for which the American Retirement Association has been a strong and leading advocate says:
“A plan shall not be treated as having a partial termination (within the meaning of 411(d)(3) of the Internal Revenue Code of 1986) during any plan year which includes the period beginning on March 13, 2020, and ending on March 31, 2021, if the number of active participants covered by the plan on March 31, 2021 is at least 80 percent of the number of active participants covered by the plan on March 13, 2020.”
In other words, once approved and signed into law, this will allow sponsors of defined contribution retirement plans to avoid the partial plan termination rules if the active participant count as of March 2021 is 80 percent of the active participant count at the time the national emergency was declared.
We’d have preferred this be done earlier, of course – but as it took 8-plus months to pass this relief package…
And there are other provisions to be analyzed as well – but wanted to let you know ASAP.