Posted on March 20, 2020

Includes Provision to Permit Limited, Early Withdrawals from Retirement Accounts

WASHINGTON, D.C. – With the ink barely dry on one new law to address the health and economic crisis posed by the COVID-19 virus, Congress is already proposing a third measure to deliver more assistance to American workers who are losing jobs and financial security due to social distancing policies advanced by federal, state and local authorities.

A Senate proposal includes a provision that would permit limited early withdrawals and higher loan amounts from retirement accounts to ease financial pressures posed by workers who have lost jobs, contract the virus or must stay at home to care for loved ones afflicted by the virus.

The Insured Retirement Institute (IRI), the leading national trade association for the retirement income industry said the provision offers workers a safety valve to address immediate needs due to the crisis and is appropriately targeted to ensure that workers do not harm their ability to prepare for future retirement income needs.

“In other times of extraordinary need, Congress has permitted limited early withdrawals or higher loan amounts from retirement accounts,” said Wayne Chopus, IRI president and CEO. “It’s important to strike the right balance between helping those in immediate need with the longer-term retirement crisis where too many Americans lack adequate retirement savings. IRI supports the efforts by Congress and the President to deliver substantial economic aid to Americans who lose jobs and are thrust into an immediate financial calamity without an income. And we support efforts to permit targeted access to retirement accounts to those in significant need.”

IRI and several other industry groups wrote to Congress today expressing support for additional measures to provide flexibility to retirees whose retirement savings may have been hit hard by the steep drop in the stock market. One provision advocated by the groups would waive minimum required distribution when there has not been enough time to recover losses from retirement accounts.

The Senate is expected to act on this next measure in the next few days.

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