Secondly, we want to hear from you if you need assistance with your retirement savings or personal insurance accounts, or if you simply have questions or concerns—it’s what we’re here for. Contact us at 1-800-279-4030 from 7:30 a.m. to 5 p.m. weekdays, or send an email to firstname.lastname@example.org. We appreciate your patience during this time and for placing your trust in us.
The Coronavirus Aid, Relief, and Economic Security (CARES) Act was signed on March 27, 2020. It is the largest stimulus package in American history. The CARES Act includes several provisions intended to loosen restrictions on, and reduce the tax consequences of, distributions and loans from retirement plans. Also included are rules waiving required minimum distributions from 403(b) plans for the 2020 calendar year and the suspension of student loan payments. In addition to these CARES Act provisions, the 2019 tax deadline was extended to July 15, 2020.
- Required minimum distributions waived for 2020. The CARES Act includes rules waiving required minimum distributions (RMDs) from 403(b) and IRA accounts for the calendar year 2020. If you would like more information about your 2020 RMD and what options are available to you, please contact our Member Service Representatives at 1-800-279-4030, Extension 8567.
- Coronavirus Related Distributions. Individuals can withdraw up to $100,000 penalty free from IRA and 403(b) retirement plans for coronavirus-related distributions (CRDs) even if they are not otherwise eligible for a distribution from their retirement account. If under age 59 ½, the 10% federal penalty for early withdrawal will be waived.
CRDs are defined as any distribution made from an eligible retirement plan on or after January 1, 2020, and before December 31, 2020, by a qualified individual described as:
- An individual who is, or whose spouse or dependents are, diagnosed with the coronavirus or with coronavirus disease (COVID-19) by a test approved by the Centers for Disease Control and Prevention.
- An individual who is financially harmed by the coronavirus or coronavirus disease as a result of (i) being laid off, furloughed, receiving reduced work hours, or quarantined, (ii) being unable to work because of a lack of child care, (iii) having to close or reduce the operation hours of a business owned or operated by the individual, or (iv) such other reasons as determined by the Secretary of the Treasury.
Individuals who have made a CRD in 2020 have the option to spread their income tax responsibility over a three year period or pay back their distribution in one or a series of payments within three years of the day after the date of distribution.
Not all 403(b) plans allow the CRD. Contact one of our Member Service Representatives to find out if your plan allows them.
However, for most people, withdrawing money from your 403(b) or IRA account shouldn’t be your first choice. As mentioned above, CRDs are subject to income tax. In addition, withdrawing assets now may make it more difficult for your account to recover from recent stock market losses. Lastly, while most retirement accounts are protected from bankruptcy, once you withdraw assets, that protection is lost.
- Student loan repayments postponed. The stimulus package gives those with federally-held student loans a six-month break from payments from April through September, with no interest or penalties. Borrowers who want to make payments can do so and pay down their balance more quickly without interest. This option does not apply to private student loans (although private lenders may be individually offering relief for borrowers).
For more information on coronavirus-related benefits and resources, visit benefits.gov.
Tax and IRA contribution deadlines extended
The deadline to file taxes and to make an IRA contribution for 2019 has been extended from April 15, 2020, to July 15, 2020. If you wish to make an IRA contribution in 2020 and apply it to 2019, some stipulations apply. Call us for assistance at 1-800-279-4030.
Information current as of 04/09/20, continue to visit our website for updates. Content is for informational purposes only and is not intended to constitute legal, financial, or tax advice. Certain recommendations or guidelines may not be appropriate for everyone. Consult your personal advisor or attorney for advice specific to your unique circumstances before taking action.
The Trustee Custodian for the WEA Member Benefits IRA accounts is Newport Trust Company. Certain state residency requirements may apply.
The 403(b) retirement program is offered by the WEA TSA Trust. TSA program registered representatives are licensed through WEA Investment Services, Inc., member FINRA.
If you choose to invest in the 403(b) or IRA programs, fees will apply. Consider all expenses before investing. Mutual fund management and redemption fees may apply. Securities offered through WEA Investment Services, Inc, member FINRA.