Coronavirus Aid, Relief, and Economic Security (CARES) Act:
I need to withdraw money from my 403(b) retirement account to cover expenses related to the COVID-19 pandemic. Am I eligible?
Under the Coronavirus Aid, Relief, and Economic Security Act (CARES Act) an employee may qualify and be eligible for a coronavirus-related distribution, if they meet one of the criteria below and self-certify through their investment provider.
- You, your spouse, or dependent was diagnosed with coronavirus;
- You have experienced adverse financial consequences as a result of being quarantined, furloughed or laid off, or your work hours have been reduced;
- You are unable to work because of a lack of child care;
- You have had to close or reduce the hours of a business as a result of the virus; or
- You have been financially impacted by other factors determined by the US Secretary of Treasury.
Is there a cap on how much I can withdraw?
Yes. During 2020, you may withdraw up to a total of $100,000 in coronavirus-related distributions from your employee contributions or any rollover funds in the JHU 403(b) plan. The university’s 457(b) plan is not eligible under the coronavirus-related withdrawal rules.
Will I have to pay an early withdrawal penalty if I take a coronavirus-related distribution?
No. Under the CARES Act, the 10-percent tax penalty that generally applies to early withdrawals from a retirement account if you are younger that 591/2 is waived for coronavirus-related withdrawals taken between January 1 and December 31, 2020.
Do I have to pay tax on these distributions?
Yes. However, the tax associated with the distributions may be paid ratably over three years, beginning with taxable year 2020. The CARES Act also allows you to recontribute the funds you withdrew back into your retirement account without interest in one or more payments within three years. The recontributed amounts will not count toward the annual contribution limit in the year that the funds are returned to your 403(b).
Are there any changes regarding loans from retirement plans?
Yes. The amount you can borrow from your 403(b) plan increased from $50,000 to $100,000 or 100% (at Fidelity only) of your employee contributions and any rollover funds, whichever is less. The increased loan limit is only available from March 27, 2020 through September 22, 2020. Loans may be obtained through your retirement accounts with Fidelity and TIAA, if applicable.
If you already have an outstanding loan, all loan payments due between March 27, 2020 through December 31, 2020 can be deferred for up to one year, but interest will continue to accrue and the loan will be re-amortized when the loan repayments restart in 2021. This means your loan repayment amount will increase when repayments start again.
How do I initiate a coronavirus distribution or loan payment suspension?
A CARES Act distribution or loan payment suspension is initiated by contacting your 403(b) investment provider directly. Completed forms (including notarized spousal signature) are to be emailed to the Benefits Service Center at email@example.com for plan sponsor signature. The Benefits Service Center will forward the approved request to the investment provider for processing.
Other Financial Resources:
Is there a food distribution program available to aid employees affected by the COVID-19 pandemic?
To support employees and their families during the COVID-19 pandemic, Johns Hopkins has launched the Food for Hopkins program, which offers two to three weekly pickups of critical food supplies at both Johns Hopkins Hospital and Johns Hopkins Bayview Medical Center.
Any university employee can visit the hospital’s Armstrong Medical Education Building at 1600 McElderry St. on Mondays and Wednesdays for a breakfast bag and a lunch/dinner bag—enough food to feed a family of four for a day. Pickups are from 7:30 to 11:30 a.m. on Mondays and from 3 to 7 p.m. on Wednesdays. At Bayview, employees should go to the Asthma and Allergy Center at 5501 Hopkins Bayview Circle, on Tuesdays from 3 to 7 p.m. and Fridays from 7:30 to 11:30 a.m.
What resources are available to university employees to help with other financial needs?
Through mySupport, you and your household family members have 24/7 telephone access to a daily life assistance counselor who can offer resources and referrals for child care, elder care, pet care, and other household needs. And mySupport also offers phone and in-person legal services and financial services. Contact Johns Hopkins mySupport at 443-997-7000 to obtain help with such things as budgeting, managing debt, avoiding foreclosure, handling creditors, tax preparation, and referrals to community resources.