Help for retirement plan sponsors and participants experiencing the financial impacts of the widespread COVID-19 outbreak continues to roll out, with Principal Financial Group being the latest to announce it is waiving some retirement plan-related fees.
Building on the passage of the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), Principal and Wells Fargo Institutional Retirement & Trust (IRT) are temporarily waiving participant-paid distribution and loan origination fees for participants taking tax-favored withdrawals, hardship withdrawals, or loans from their employer-sponsored retirement accounts.
Additionally, retirement plan sponsors will have fees temporarily waived for plan amendment changes to allow participants to access these programs, or who need to reduce or remove their employer contributions.
“The global spread of COVID-19 has affected almost every aspect of our lives,” said Dan Houston, chairman, president, and CEO of Des Moines, Iowa-based Principal. “As we all focus on keeping ourselves and our families safe and healthy, we want to help many of our customers reduce short-term financial burdens enabling them to stay committed to their long-term financial plans and security. We’re adjusting our businesses to help customers manage through some of the near-term challenges created by the virus.”
One of the key 401k-related provisions of the Cares Act allows hardship distributions from qualified retirement accounts for coronavirus-related purposes of up to $100,000 from 401ks or IRAs for those under 59½, without incurring the standard 10% early withdrawal penalty.
“The CARES Act is an important bridge to help those most affected today by the spread of COVID-19. We’re making the changes needed on our side to ensure plan sponsors and participants aren’t hit with additional costs to access these lifelines,” said Renee Schaaf, president of Retirement and Income Solutions. “We continue to work closely with policymakers in Washington on thoughtful solutions to help people and businesses manage not only the near-term pain of this crisis, but also potential long-term consequences. We remain focused on supporting our customers with the information, service, and flexibility they need.”
Support for benefits customers
For employers who hold group benefits coverage, Principal is temporarily halting any rate increases. This is for employers with fewer than 500 employees with policy renewal dates coming due between May 1 and August 15 of this year.
“The impact of this pandemic has been swift and fierce, but we’re doing all we can to help,” said Amy Friedrich, president of U.S. Insurance Solutions. “The needs of our small business customers are especially top of mind, while we focus on being fast, practical, and creative in how we serve them during these unprecedented and difficult times.”
For more information about the company’s changes related to COVID-19, visit principal.com/heretohelp.
Veteran financial services industry journalist Brian Anderson joined 401(k) Specialist as Managing Editor in January 2019. He has led editorial content for a variety of well-known properties including Insurance Forums, Life Insurance Selling, National Underwriter Life & Health, and Senior Market Advisor. He has always maintained a focus on providing readers with timely, useful information intended to help them build their business.
