Stimulus Bill Changes Retirement Plans for 2020

The stimulus bill, signed by President Trump on March 27, 2020, formally known as the Coronavirus Aid, Relief, and Economic Security Act (CARES Act), provided some specific changes to retirement plans, including the Ministers’ Retirement Plan administered by the Church of God Benefits Board, Inc.  However, the changes are only applicable during the calendar year of 2020.

Hardship Distributions

During 2020, participants may take certain hardship distributions of up to $100,000. The distribution, if meeting the criteria set out in the legislation, would be exempt from the 10% penalty that normally applies to those taking distributions before reaching the age of 59½.

To qualify for an eligible distribution under this hardship provision, the participant, his or her spouse, or dependent must have been diagnosed with the coronavirus, or lost income due to a layoff, business closure, quarantine, reduction in hours, or inability to work due to the lack of child care. The participant may self-certify to their eligibility for this special hardship distribution.

Although the 10% early surrender penalty is waived, the distribution is taxable. However, the taxes can be spread over three years if the participant so chooses. Further, the participant may re-contribute the funds to the retirement plan within three years without regards to the contribution limits.

Distributions requested under this hardship provision must occur before December 31, 2020.

Expanded Member Loans

The CARES Act also addresses member loans from retirement plans. Under the legislation, a participant, diagnosed with the coronavirus or affected by economic loss from the virus, can take a loan from their retirement account of up to $100,000, or one-half (½) of their account balance, whichever is less. This amount is double the current loan limit. 

Further, until December 31, 2020, participants with existing or new loans – and impacted by the coronavirus, may delay any re-payments due in 2020. This provision basically extends the repayment deadline for these loans by almost a year. 

To qualify for the expanded loan provision and the deferred payment provision, the participant must:

• Be diagnosed with COVID-19
• Have a spouse or dependent diagnosed with COVID-19, or
• Have experienced adverse financial consequences as a result of being quarantined, furloughed, laid off, having work hours reduced, being unable to work due to the lack of child care due to COVID-19, closing or reducing hours of a business owned or operated by the individual due to COVID-19, or other factors as determined by the U.S. Treasury Secretary.

Required Minimum Distribution Waived in 2020

The CARES Act also waves the requirement for a required minimum distribution (RMD) in 2020 for all participants. This provision was inserted in the legislation to allow participant’s accounts the opportunity to grow after the massive sell off caused this year by the coronavirus.

Other Item Included

Although not specifically related to retirement issues, the CARES Act contains a provision allowing individuals to deduct, “above the line,” up to $300 for cash contributions made to charitable organizations, even if that person does not itemize. This provision will be allowed on 2020 tax returns filed next year.


While the information discussed here is included in this massive 880-page bill, the regulations to implement each provision have not been written and it is expected that those regulations will take at least several weeks to be fully promulgated. The Ministers’ Retirement Plan, administered by the Church of God Benefits Board, Inc., will seek to comply with the legislation while awaiting final regulations. However, in some situations, additional guidance will be needed from the Internal Revenue Service before we can proceed.

(NOTE: The information provided is based upon a review of the legislation, discussions with officials engaged in the direct negotiation of this legislation, and published reports on the legislation. Please be aware that regulations to carry out the legislation could change the information provided above.)


About benefitsboard

Art Rhodes is the President and CEO of the Church of God Benefits Board, Inc. - the administrator of the Ministers' Retirement Plan and the Church Loan Fund, Inc. The corporate offices of the Benefits Board are in Cleveland, TN.
This entry was posted in 03 - March 2020, 2020, Uncategorized. Bookmark the permalink.

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