Fidelity’s 401(k) Loans and the CARES Act
The Coronavirus Aid, Relief, and Economic Security (CARES) Act permits qualifying participants to delay loan repayments that are due between March 27, 2020 (the date of CARES Act enactment) and December 31, 2020. The legislation also permits increasing the maximum loan amounts. Fidelity is in the process of adding these provisions to netbenefits.com and they should be available shortly.
LOAN PAYMENT DEFERMENT PROCESS:
- Qualifying participants may contact Fidelity by phone to request deferment of their loan(s).
- Participants will need to certify their eligibility to defer loan payments.
- A qualified individual is someone diagnosed with coronavirus, have a spouse or dependent diagnosed, any individual who experiences adverse situations as a result of being quarantined.
- Deferment of all payments will begin with the first payment due or as soon as administratively feasible after the participant self-certifies their qualification and will end on December 31, 2020.
- All loans deferred will be re-amortized in January 2021.
INCREASE PERMISSIBLE LOAN LIMITS (CARES ACT LOANS):
The CARES Act permits an increase of the maximum loan limit for qualified individuals by 100% of their vested account balance or up to $100,000 for loans requested by September 23, 2020.
- The CARES Act Loan includes a delay of repayment until January 2021.
- A CARES Loan will be treated as an additional loan.
Contact Fidelity at 1-800-278-4015 if you have any questions, or if you need help determining what option (CARES loan, loan deferment or CARES Distribution) is best for you.