McClatchy 401(k) Plan Changes
CORONAVIRUS RELIEF
We have updated our 401(k) plan to provide financial assistance to colleagues impacted by Coronavirus. The changes include relief for colleagues currently repaying 401(k) loans and a new option to withdraw funds from your 401(k) due to Coronavirus.
If you have a 401(k) loan, you can suspend your loan payments for up to a year. To be eligible, you must be affected by the coronavirus. This includes anyone who contracted COVID-19, whose spouse or dependents contracted it, or who lost their job or income because of the quarantine.* Following the loan repayment suspension period, the loan will be reamortized to include interest accrued during the suspension, and the length of time you have to repay the loan may be extended by the duration of the suspension (up to one year).
If you haven’t been affected by the coronavirus, you can suspend payments on any plan loan, but only until July 15. If you want to suspend your loan repayments, you must call Vanguard Participant Services at 800-523-1188.
Special withdrawals with favorable tax treatment will be permitted for those affected by the coronavirus. This includes anyone who contracted COVID-19, whose spouse or dependents contracted it, or who lost their job or income because of the quarantine.*
If you are eligible, you may take out up to $50,000 total from your 401(k) account. The regular income taxes you owe on the distribution can be spread over a three-year period. Additionally, if you’re younger than age 59½, the 10% federal penalty tax that usually applies will be waived.
In addition, you may avoid taxes on that distribution if you’re able to put the money back into your account within three years.
A Coronavirus-related withdrawal is not subject to the normal mandatory 20% Federal tax withholding for 401(k) distributions. Instead, 10% will be withheld, or you can waive this withholding entirely.
The distribution fee for this coronavirus-related withdrawal will be waived to help assist you during this difficult time.
Participant self-certification of eligibility is required for these distributions. At a later date, you may be required by the IRS to offer proof that you were impacted by COVID-19.
If you want to take action, contact Vanguard Participant Services at 800-523-1188. Associates are available to take your calls Monday through Friday from 8:30 a.m. to 9 p.m., Eastern time, but wait times may be longer because of high call volumes.
*Under the Coronavirus Aid, Relief, and Economic Security (CARES) Act, you are an affected individual if you: (1) are diagnosed with COVID-19 by a CDC-approved test, (2) have a spouse or dependent who was diagnosed by a CDC-approved test, or (3) experience adverse financial consequences due to quarantine; layoff, furlough, or reduced hours; inability to work because of lack of child care; closure or reduced hours of a business owned by the individual due to the virus; or other reasons identified by Treasury. Plan administrators can rely on participant self-certification of eligibility. At a later date, you may be required to offer proof that you were impacted.