Search

COVID-19, the CARES Act and what it means for you.

On March 27, 2020, the federal government signed The Coronavirus Aid, Relief and Economic Security Act (CARES Act) into law, a $2 trillion stimulus bill aimed at helping people, states, and businesses devastated by the coronavirus disease 2019 (COVID-19) pandemic.

The CARES Act is intended to bring relief to those impacted by the COVID-19 pandemic. It also has significant implications on your retirement planning. While the Act is aimed at helping you in the short term, be sure to understand the long-term impacts to your overall financial picture. We are still here to help and have made it easy for you to schedule an appointment or join a webinar with your local Retirement Specialist.

Certain provisions of the CARES Act impact the Plan in three areas:

  • Required Minimum Distributions (RMDs)
  • Distributions
  • Loans
NRW-6989CA-CA.2
Expand All

Things to remember about your retirement planning

Any loans or withdrawals can impact your retirement nest egg. Never lose sight of the long-term impact they could have on your retirement. History tells us the markets will return. If you take yourself out of the market now, it may prevent you from benefiting from potential gains.

It’s important to weigh all available options to address your immediate financial needs while still being thoughtful about your future financial well-being.

Required Minimum Distributions (RMDs)

The CARES Act made temporary waivers to RMDs for all types of defined contribution plans (including 401(a), 401(k), 403(b), and governmental 457(b) plans) and IRAs for the calendar year 2020. This allows preservation of your defined contribution retirement savings for this period. These changes include the following:

  • RMDs are suspended for 2020. This includes 2019 first year RMDs that were deferred until April 1, 2020.
  • If you've previously scheduled to receive periodic distributions (monthly, quarterly, annually) you will continue to receive them unless you request to have your payments stopped.
  • If you haven't previously scheduled your RMD for 2020, it will be stopped automatically. If you'd still like to receive your RMD for 2020, you can complete a Benefit Payment Booklet.
  • If you already received an RMD for 2020, you can redeposit the money back into your Savings Plus account within 60 days of receipt of the original distribution. Please refer to the chart below to determine if your RMD is eligible for redeposit.

RMD Receipt Date Can I redeposit my RMD? Redeposit-Eligible Period
January 1, 2020 - January 31, 2020 No N/A
February 1, 2020 - May 15, 2020 Yes April 1, 2020 - July 15, 2020
May 16, 2020 - December 31, 2020 Yes 60 Days from Date of Receipt

Coronavirus-Related Distributions (CRDs)

The CARES Act created a new type of distribution that gives access to all eligible participants, including those still employed as well as those out of work, while minimizing some of the tax consequences. To be eligible to take a CRD, you must meet one of the following qualifications as defined in the CARES Act:

  1. I have been diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention; or
  2. I have a spouse or dependents diagnosed with such virus or disease by such a test; or
  3. I have experienced adverse financial consequences stemming from such virus or disease as a result of:

    • Being quarantined, furloughed or laid off
    • Having reduced work hours
    • Being unable to work due to lack of child care
    • The closing or reduction of hours of a business I own or operate

For qualifying individuals only, distribution amounts up to $25,000 can be made anytime from January 1, 2020 to December 31, 2020. The following Savings Plus Plans are eligible: 401(k), 457(b), Part-time, Seasonal and Temporary (PST) and Alternate Retirement Program (ARP). The following applies to the CRD provisions available to participants that meet the qualifications:

  • You must self-certify that you meet the eligibility requirements stated above.
  • You may take up to and cannot exceed the lesser of 100% or your balance or $25,000 total across all plans now through December 31, 2020.
  • Total Coronavirus-Related Distributions cannot exceed $100,000 from all California state-sponsored plans within the calendar year. Any distributions will need to be coordinated with your 403(b) and any other state sponsored 401(k) plan, if applicable.
  • You can spread the taxation of this distribution evenly over a three-year period. Note that you will receive one 1099-R in January 2021 for the full amount of your distribution. Consult with your tax advisor for guidance on how to spread the tax liability over the allowable three-year period.
  • A 10% income tax will be withheld from your distribution unless you elect otherwise.
  • Amounts distributed to qualified individuals under the CARES Act aren't subject to the additional 10% early withdrawal penalty.
  • You have the option to redeposit the distribution back into your Plan account within three years. Amounts redeposited will be treated as a rollover contribution to the Plan and aren't subject to the annual contribution limit.

Complete the CARES Act Self-Certification and Coronavirus-Related Distribution Request Form

Loan Provisions

Delay Loan Repayments

The CARES Act provides relief for loan repayments due between March 27, 2020 and December 31, 2020 on new or existing loans. To be eligible for the Loan Repayment Delay provision, you must meet one of the following qualifications as defined in the CARES Act:

  1. I have been diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention; or
  2. I have a spouse or dependents diagnosed with such virus or disease by such a test; or
  3. I have experienced adverse financial consequences stemming from such virus or disease as a result of:

    • Being quarantined, furloughed or laid off
    • Having reduced work hours
    • Being unable to work due to lack of child care
    • The closing or reduction of hours of a business I own or operate

The following applies to the Loan Repayment Delay provisions available to participants that meet the qualifications:

  • Loan repayments due on new or existing loans through December 31, 2020 can be delayed until January 1, 2021.
  • The term of your loan will increase by the term of the delay period.
  • Interest will continue to accrue on the delayed repayments.
  • The accrued interest will be re-amortized into your loan.
  • The new loan repayment amount effective January 1, 2021 will include the accrued interest.
  • Loans must be in good standing.

Modifications to Current Loan Provision

Additionally, we're making the following changes to our loan parameters for all participants which will be effective through December 31, 2020:

  • Increasing the maximum number of loans per plan from one to two. However, primary residence loans are limited to one per plan
  • Reducing the minimum required balance to qualify for a loan from $10,000 to $5,000
  • Reducing the minimum loan amount from $5,000 to $2,500
  • Waiving the $50 loan initiation fee until September 30, 2020*

Complete the CARES Act Self-Certification and Coronavirus-Related Loan Repayment Delay Request Form

*The $50 loan initiation fee is waived ONLY for participants who self-certify that they meet the qualifications as defined in the CARES Act as noted above.

Our commitment to you is as strong as ever

We’ll continue to be here for you, no matter what’s to come. Our commitment to you remains unwavering and we'll continue providing the support and education you need to make decisions that are right for you.

Perspective helps

See what Nationwide Retirement Plans' President Eric Stevenson has to say, including:

  • How we're here for you and will answer your questions
  • Our experience in weathering market volatility
  • The importance of staying the course and having an investment plan


Eric Stevenson Video Snapshot

Watch video

As always, you can access your account online, or contact us with questions. We're committed to addressing your concerns. There are several ways you can connect with your account or with us:

Login to your Savings Plus account to make changes to your contributions, update your investment strategy, and more.

Contact the Savings Plus Solutions Center at (855) 616-4776 from 5 a.m. – 8 p.m. PT, Monday-Friday.

Reach out to the licensed Retirement Specialist in your area to set up an appointment.

NRW-6989CA-CA.1
NRW-6989CA-CA.2
Modal Dialog Start Close

You are going to a page that is not part of this website

We make no endorsement of its content or guarantee of its accuracy. If the Continue button does not work, the page may have been moved or removed.

Please consider logging out of your account before you proceed.

NRW-2913AO.1
Modal Dialog End