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News & Views | Q4 2020 Page 3 of 4

CARES Act Sunsets
The CARES Act was passed in March, 2020 and gave plan sponsors options to give participants financial relief and assistance during
the pandemic. Qualifying participants were allowed to make in-service withdrawals of up to $100,000, and to take loans (if the plan
offered loans) of 100% of their accounts up to $100,000. The CARES Act was effective through December 31, 2020 and as of this
writing has not been extended.
As a reminder, plan sponsors who adopted these optional CARES Act provisions are required to update their Plan Document
accordingly, by December 31, 2024. Your NFP advisor can help with language to meet this requirement.
Consolidated Appropriations Act 2021 (CAA) Signed in December

The latest COVID-19 stimulus relief package, CAA, has received much attention for the $600 payments authorized for many US
taxpayers. What you may not be aware of is that bill also included some provisions designed to offer financial relief to qualified plan
participants in retirement savings plans. The highlights of the CAA provisions are described below.

“Qualified Individual:” The provisions in CAA all pertain to qualified individuals, so it is important to understand how that is defined.
A qualified individual is someone whose residence is located in a qualified disaster area, and who has suffered an economic loss as
a result of the disaster.
“Qualified Disaster:” A qualified disaster is defined as any geographical area declared a natural disaster, e.g., wildfires & hurricanes.
Qualified disaster distributions are allowed in amounts of up to $100,000, and like the CARES Act, distributions are allowed to be
repaid to any eligible retirement savings plan over three years. If the taxpayer does not want to repay the distribution, he or she
may choose to pay taxes on the amount withdrawn, over (up to) a three year period. The CAA also allows qualified disaster loans,
where qualified individuals may withdraw amounts of up to $100,000 or 100% of their accounts (normal loan limits are $50,000 /
50%). Loan repayments may also be suspended for up to one year. The qualified disaster must have occurred between December
28, 2019 – December 27, 2020.

All the above retirement plan provisions are permissive, meaning that the plan sponsor has the option to implement any or all,
or none, of the benefits. For any of the provisions the plan sponsor decides to implement, the plan document must be amended,
generally no later than December 31, 2024. Please consult your NFP advisor for assistance in fully understanding the options and/
or for assistance with plan document amendments.

U.S. 2020 DEFINED CONTRIBUTION PLAN SPONSOR SURVEY RELEASED

A recent survey of defined contribution plan sponsors found that a majority of employers are looking at adding innovative features
to their plans to help enhance employees’ overall financial wellness. Some of the innovations of highest interest are 1) assisting
employees in building a rainy day fund with after-tax money, and 2) providing links between student loan repayments and the
retirement savings plans. The survey, conducted by Willis Towers Watson, also found that employee financial stress has increased
various workplace challenges; managing fees is a high priority, and 75% of respondents have benchmarked their fees in the recent
past, often resulting in fee reductions; managing cybersecurity is a top fiduciary concern; and there is a growing focus on Target
Date Fund (TDF) “fit” with over 50% of respondents reviewing TDF suitability with participants needs and demographics.

For a full summary of the U.S. 2020 Defined Contribution Plan Sponsor Survey, see the Willis Towers Watson press release here.

NAGDCA 2021 CONFERENCE

NAGDCA has announced that they are planning for an in-person conference, scheduled for September 12-15, 2021, in Phoenix,
Arizona. They are also preparing to move the conference to an all-virtual model like they did in 2020, as well as developing a hybrid
model that allows in-person or virtual attendance. To help prepare the conference program, NAGDCA has issued a call for topics,
requesting ideas for presentations of most interest to plan sponsors. Click here to access the online topic submission form.