Your Practice and the Coronavirus Aid, Relief, and Economic Security (CARES) Act - UPDATES

Editor’s Note: to read Eileen’s prior post on the CARES Act, click here.

Back when I first wrote about the CARES Act, we were all just starting to grapple with the challenges ahead, and few of us would’ve predicted that as time moved ahead… we’d actually be in a worse place.

(Though to be fair, 2020 started by burning a continent, which was not a very subtle hint, really.)

Somewhere there’s a tiny first responder who could put that PPE to better use

My ill-advised jokes aside, the same challenges to family law practitioners during the pandemic persist, and I recommend the following articles and resources to my blog readers, whom I wish for the very best and continued good health.

IRS Notice 2020-42

First and foremost, please be aware that on June 3, the Internal Revenue Service (IRS) issued Notice 2020-42 to provide temporary relief for certain participant elections required to be witnessed in the “physical presence” of a plan representative or notary public, including spousal consents. The guidance is intended to make it easier for qualified individuals to receive payments of coronavirus-related distributions and plan loans in the light of local shutdowns and social-distancing practices that make it difficult to find a notary or to reach a plan representative. (See also: IRS Notice 2020-50 & IRS Notice 2020-62.)

Approving QDROs During Court and Government Office Closures
MorganLewis.com - April 27, 2020, by Patrick Trunzo and Matthew Hawes

This blog post discusses temporary procedures that plans could adopt to continue QDRO qualification and processing during the pandemic. Usually, parties are required to submit a certified copy of the order, date-stamped by the clerk of courts showing filing in order to prevent fraud. However, it may be difficult to obtain a certified copy with the courts closed or limited due to the pandemic. The post discusses two simple alternatives to providing a certified copy: a party verification approach, where the plan administrator could accept signed representations from the parties that it is the copy filed with the court (under penalty of perjury and that certified copy is unavailable), or a plan administrator verification approach, where the administrator verifies using the electronic version filed with the court. The article noted that the plan administrator could require parties to submit certified copy when it becomes available, but that this would cause additional burden and cost.

Pandemic Relief Measures Place Women’s Retirement Security at Risk
Pension Rights Center - April 29, 2020, posted by Emily Spreiser

This brief article discusses the pandemic’s special rules and regulations that may affect women’s retirement security.  A number of changes have been enacted under the CARES Act to make it easier for people to access their retirement savings during the economic crisis. For instance, it easier for people in 401(k) plans who meet certain tests to take large sums of money out of their accounts through loans and hardship withdrawals. These types of benefit distributions (unlike those for federal employees in the Thrift Savings Plan) do not require a spouse to give permission. 

The article also noted that retirement industry groups are asking the government to eliminate in-person notarization requirements, in favor of electronic notarization, allowing for possible fraud.

Lastly, the article discussed the risk faced by spouses whose divorces are delayed because of the pandemic, with court systems closed or behind, giving spouses an opportunity to hide assets.

Covid-19-Related Employee Retention Credits: Amount of Allocable Qualified Health Plan Expenses FAQs
IRS.gov - Updated May 11, 2020

Covid-19 Related Employee Retention Credits: Amount of Allocable Qualified Health Plan Expenses FAQs (Not included in the Internal Revenue Bulletin): Qualified Wages as an allocable portion of qualified health plan expenses.

Blog Posts are intended to bring attention to developments in the law and are not intended as legal advice for any particular client or any particular situation. Please consult with counsel of your choice regarding any specific questions you may have.