Your third-party administrator (TPA) might contact you, regarding the coronavirus distribution that is free from the early distribution penalty added by the CARES Act. You have the right, whether to offer it or not.
While the hardship distributions are limited to certain circumstances, the coronavirus distribution allows participants to invade their account balances for any costs related to a diagnosis from Coronavirus or job furlough or termination.
While I don’t like the leakage of retirement plan assets and participants invading retirement assets for today’s needs, I always believe that it’s their money and this pandemic is a once in a lifetime financial catastrophe for millions of Americas. We also don’t understand every participant’s financial standing even if they are still gainfully employed.
Don’t be a Scrooge and allow them access to their money.
