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Does EBSA Notice 2020-01 provide relief for noncompliance with the ERISA retirement plan loan and distribution procedures?

Posted by Bonita Hatchett-Bodle

May 6, 2020 2:19:37 PM

Yes. The Department of Labor (DOL) has taken a temporary non-enforcement position on retirement plan loan and distribution procedural deficiencies. Under the Notice, retirement plans that do not follow procedural requirements for plan loans or distributions imposed by the terms of the plan, will not be treated as in violation of Title I of ERISA if:

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Topics: CARES Act, EBSA Notice 2020-1, ERISA Title I Reporting and Disclosure, participant loans, distributions

What are the requirements for non-enforcement under EBSA Notice 2020-01 in regard to retirement plan loan related issues?

Posted by Bonita Hatchett-Bodle

May 6, 2020 2:16:32 PM

Under the Notice, the Department of Labor (DOL) will not consider any person to have violated Title I of ERISA, including the requirement that the loan be adequately secured by the account balance, solely because:

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Topics: CARES Act, EBSA Notice 2020-1, ERISA Title I Reporting and Disclosure, participant loans

Does the relief provided by EBSA Notice 2020-01 extend to participant contributions and loan repayment?

Posted by Bonita Hatchett-Bodle

May 6, 2020 2:14:02 PM

Yes. Under the Notice, the Department of Labor (DOL) will not take enforcement action with respect to a temporary delay in forwarding participant payments and withholdings to employee pension benefit plans during the period from March 1, 2020, and ending on the 60th day following the announced end of the national emergency if the delay is solely attributable to the COVID-19 outbreak. However, employers and service providers must act reasonably, prudently, and in the interest of employees to comply as soon as administratively practicable under the circumstances.

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Topics: EBSA Notice 2020-1, ERISA Title I Reporting and Disclosure, participant loans

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