IRS Updates Coronavirus-Related Relief FAQs
The IRS recently updated its coronavirus-related relief for retirement plans and IRAs questions and answers (FAQs) for Sec. 2202 of the Coronavirus Aid, Relief, and Economic Security (CARES) Act, which provides for special distribution options and rollover rules for plans. The updated FAQs address questions regarding rehires following bona fide retirement and in-service distributions.
Specifically, the first FAQ clarifies that a rehire due to unforeseen circumstances will not affect what otherwise was considered under facts and circumstances to be a bona fide retirement. An example is also provided in which benefit distributions may continue after the rehire if plan terms permit—recommending that sponsors review plan provisions in light of rehired employees. The second FAQ discusses when qualified pension plans are permitted to allow in-service distributions.