IRS Notice 2020-51
This Notice provides guidance on the Coronavirus Aid, Relief, and Economic Security (CARES) Act provision that allowed for a waiver of 2020 Required Minimum Distributions (RMDs). The Notice permits rollovers of waived RMDs and extends the 60-day rollover period to Aug. 31, 2020. It also answers several questions related to the RMD waiver and provides a sample amendment that affords participants a choice as to whether or not they want to receive waived RMDs in 2020.
The full text of the Notice can be found here.
IRS Notice 2020-52
This Notice clarifies certain rules related to safe harbor plans:
- A mid-year change reducing contributions for highly compensated employees will not be considered a reduction or suspension of safe-harbor contributions. However, an updated safe harbor notice and an opportunity to change elections must be provided to impacted employees.
- Allows a safe harbor plan to reduce or suspend safe harbor contributions, between March 13 and August 31, without regard to the requirements that generally apply which are:
- The employer is operating at an economic loss
- The employer’s safe harbor notice indicates that the plan may be amended, and the change will not be effective until at least 30 days after impacted employees are notified
This Notice also provides relief to the supplemental notice requirements related to plan amendments that reduce or suspend safe harbor non-elective contributions. The supplemental notice does not need to be provided 30 days before the reduction or suspension of non-elective contributions. The Notice must still be provided by Aug. 31, 2020, and the plan amendment must be adopted no later than the effective date of the reduction or suspension of the contributions.
The full text of this notice can be found here.