Reminder: CARES Act Withdrawal Opt-out Window Closes May 11

As announced on April 15, 2020, the Coronavirus Aid, Relief and Economic Security (CARES) Act created the opportunity for certain financial relief measures through employer-sponsored retirement plans. As a result, NRECA is offering participants in the NRECA-sponsored 401(k) Pension Plan, who meet federal eligibility requirements, the ability to take one special in-service withdrawal from their 401(k) account between June 1 and December 31, 2020.

As mentioned in the original announcement, cooperatives can opt out of offering this withdrawal option to your co-op’s employees. If you wish to opt out of this provision, you must notify your field representative and NRECA must receive the completed necessary documentation on or before May 11, 2020. If you do not opt out by May 11, NRECA will assume that your co-op will be providing the withdrawal option to your employees.

It is important for benefits administrators to notify participants of this plan offering. We recommend you do so within 60 days of the decision to participate in the withdrawal provision. NRECA has developed a participant notification template to assist with this task.

Qualified participants will need to attest to their ability to meet one (or more) of the federally mandated eligibility criteria and complete NRECA’s CARES Act Distribution Attestation & Withdrawal Form, which will be finalized and posted on the NRECA Employee Benefits website prior to the end of the opt-out period. A notification in NRECA Employee Benefits Weekly will alert you to its availability. The participant will be required to obtain their benefits administrator’s signature in addition to obtaining their spouse’s signature (if they are married) in the presence of a notary public.

You may be asked if a participant qualifies for this withdrawal if an individual other than the participant experiences one of the financial hardships listed as a requirement. The eligibility criteria indicates that it must be the participant who is specifically impacted by adverse financial circumstances, not a spouse or other dependent.

If you have additional questions about this withdrawal opportunity, please reach out to your co-op’s field representative.

NRECA cannot provide legal or tax advice to co-ops. The information presented here is our interpretation of the laws and regulations. Co-ops should seek the advice of their legal counsel and tax advisor.