A group of 24 retirement industry trade groups wrote to Congress on Friday urging immediate action to provide relief to employers that offer retirement plans, plan participants and retirees.
“This is a challenging time,” the group wrote in their letter. “Any action taken by Congress to allow pre-retirement account access must be balanced with America’s current retirement savings challenges and the impact of current market conditions on retirement plan balances.”
The groups called for allowing penalty-free qualified distributions and loan modifications for individuals impacted by the coronavirus pandemic; providing a temporary waiver for calendar year 2020 of the rules for required minimum distributions from defined contribution plans and individual retirement accounts; assisting defined benefit plan sponsors by freezing the interest rate at pre-COVID-19 pandemic levels and extending the final contribution due dates, among other suggestions.
“With the recent cliff drop in asset values and the corresponding continued declines in interest rates, defined benefit plan sponsors are looking at unexpectedly large minimum required contribution requirements,” the groups wrote. “These unexpectedly large contributions will tie up funds that could otherwise be used to pay wages and invest in the business.”
The groups also urged Congress to temporarily pause single-employer Pension Benefit Guaranty Corp. premiums, which they said would allow businesses to use their capital to weather the COVID-19 crisis, and to extend filing, notification and payment deadlines.
“Financial relief and support is critical as we work through this crisis,” said Tim Rouse, executive director at the SPARK Institute, which was one of the groups to sign the letter. “The retirement community stands ready to do its part. We ask Congress to help.”
Other organizations that signed the letter were:
- American Bankers Association.
- American Benefits Council.
- American Council of Life Insurers.
- American Retirement Association.
- Association for Advanced Life Underwriting.
- Committee on Investment of Employee Benefit Assets.
- Defined Contribution Alternatives Association.
- ERISA Industry Committee.
- Financial Services Institute.
- Insured Retirement Institute.
- Investment Adviser Association.
- Investment Company Institute.
- National Association of Government Defined Contribution Administrators.
- National Association of Insurance and Financial Advisors.
- National Association of Manufacturers.
- National Association of Professional Employer Organizations.
- National Small Business Association.
- NTCA-The Rural Broadband Association.
- Retirement Industry Trust Association.
- Securities Industry and Financial Markets Association.
- Small Business Council of America.
- Small Business Legislative Council.
- Stable Value Investment Association.