This week, Empower Retirement asked the Department of Treasury and the Internal Revenue Service to enact disaster relief for retirement savers hurt by the spread of coronavirus.
[Related: FinFit Providing Extended Support for Employees During COVID-19]
“Empower is asking for relief that would make it easier for retirement plan participants, including Individual Retirement Account owners, to access their retirement funds during this unprecedented time of novel coronavirus and resulting market volatility,” Edmund Murphy, Empower Retirement president and CEO, said in a statement.
Among the relief being requested is:
- The elimination of the 10% penalty on early retirement plan withdrawals
- Allowing qualified disaster distributions in income over three years
- Allowing participants to spread tax paid on withdrawals up to $100,000 over three years
Empower serves 9.4 million plan participants through workplace plans and IRAs.
The American Retirement Association and National Association of Plan Advisors has called for more extensive relief, including giving participants three years to pay back distributions, increasing loan limits to the lesser of $100,000 or 100% of the vested account balance, tax filing extensions and required minimum distribution waivers.
On Wednesday, the IRS announced that although taxpayers must still file by April 15, they may have until July 15 to make any payments due without incurring interest or penalties.
Research from EBRI found that just one in five families has enough saved to cover three months of lost income. Employers that offer financial wellness programs are far more likely to focus on retirement savings than emergency savings: 35%, compared to 7%.
Danielle Andrus works as an editor for The Financial Planning Association® (FPA®). Over the past 15 years, she has worked in various capacities, including writing and editing. Andrus has worked for several notable publications and outlets and spent more than seven years as the executive managing editor at ALM Media, publisher of Investment Advisor magazine and ThinkAdvisor.com. Before that, she was online editor for Summit Professional Networks, where she oversaw newsletter development for four magazines, including Benefits Selling, Senior Market Advisor, Boomer Market Advisor, and Bank Advisor.
