Over the years, Congress has been very good about providing plan sponsors with optional disaster relief to help participants obtain additional funds from their retirement plan (or individual retirement plan (“IRA”)) on a tax favored basis, or providing for expanding plan loans and repayment relief for those impacted by a natural disaster declared by the Federal Emergency Management Agency (“FEMA”). But the one historical complaint regarding this very welcomed relief is that it comes too late. Well, no longer! Section 331 of SECURE 2.0 Act of 2022 provides for automatic and permanent disaster relief, which is available as soon as a disaster is declared a “major disaster.” This relief is retroactive beginning January 26, 2021, and is intended to replace the ad hoc disaster relief that has been available over the years for various disasters. The Internal Revenue Service (“IRS”) posted a “Frequently Asked Questions” (“FAQ”) information page on its website in May 2024 to provide additional information and “soft guidance” to plan sponsors about this SECURE 2.0 section. [Fact Sheet 2024-19]
In this Journal of Pension Benefits article, “IRS Posts FAQs for SECURE 2.0 Disaster Relief Guidance,” Groom principal Elizabeth Thomas Dold covers the SECURE 2.0 provision which stipulates the availability of automatic and permanent disaster relief soon as a major disaster is declared and delves into related IRS guidance.
To read the article, click here.
