This communication is being emailed April 16, 2020 to eligible New York retirement plans participants.

As an eligible participant in the NYU retirement program, you should be aware of expanded options available to you with regard to Coronavirus-related retirement plans withdrawal and loan options as a result of the Coronavirus Aid, Relief, and Economic Security (CARES) Act.

The CARES Act was signed into law on March 27, 2020 and provides options for you to consider as you navigate financial decisions in the coming months. As always, the University recommends reaching out to your personal financial advisor or a TIAA financial consultant to review your current situation – along with short- and long-term financial goals – before making any decisions. It is important to understand these options so you can determine if they are applicable to and/or right for you.

NYU will adopt the following CARES Act provisions for our retirement plans:

  • Penalties and mandatory withholding are waived for qualified distributions from retirement plan accounts
  • Retirement plan loan limits have been increased
  • Optional suspension of required minimum distributions (RMDs) for 2020

If you meet the CARES Act eligibility criteria detailed below, would like to speak with a TIAA financial consultant, or would like to request a loan or distribution, you can do so by accessing NYU Home and selecting the NYU Retirement Plans card or by calling the NYU Retirement Plans Helpline at TIAA at 844-NYU-TIAA (844-698-8422), where representatives are available weekdays from 8:00 am to 10:00 pm and Saturday from 9:00 am to 6:00 pm EST.

CARES Act Eligibility for Retirement Plan Withdrawals and Loans

You are considered eligible to take advantage of the enhanced distribution or loan options from your retirement plan if any of the below conditions are met:

  • You have been diagnosed with COVID-19 by a test approved from the Centers for Disease Control and Prevention (CDC).
  • You have a spouse or dependent who has been diagnosed with COVID-19 by a test approved from the CDC.
  • You suffer financial consequences as a result of quarantine, employment furlough, layoffs, reduced work hours, or cannot work due to lack of child care as a result of Coronavirus.
  • You experience a financial loss to an individually-owned or -operated business that is caused by a closing or reduction of hours due to Coronavirus.

Three Ways the CARES Act Can Help if You are Eligible

1. Coronavirus-Related Distributions

Penalties and mandatory withholding are waived for qualified distributions from retirement plan accounts. Applies to:

  • The NYU Retirement Plan for Members of the Faculty, Professional Research Staff, and Administration
  • The NYU Supplemental Tax Deferred Annuity (STDA) Plan
  • The NYU Retirement Plan for Adjunct Faculty

Provided that the Coronavirus-related eligibility criteria are met, the CARES Act waives the 10% early withdrawal penalty and eliminates the 20% mandatory withholding for Coronavirus-related distributions of up to $100,000 across qualified retirement plans and IRAs. While the usual 20% mandatory withholding will not be taken from distributions, you will have the option to add withholding if you wish.

Distributions will be subject to taxation, and you will have the option to pay taxes due over a three-year period. We suggest that you consult your personal tax advisor.

The CARES Act also allows you to return withdrawn funds within three years regardless of that year’s contribution limit, making it easier to replace the amount of your distribution back into your retirement account.

2. Coronavirus-Related Loans

Retirement plan loan limits are increased. Applies to:

  • The NYU Retirement Plan for Members of the Faculty, Professional Research Staff, and Administration
  • The NYU Supplemental Tax Deferred Annuity (STDA) Plan

Maximum retirement plan loan limits have been increased from $50,000 or 50% of vested account balances to $100,000 or 100% of the vested account balance for loans made within 180 days of enactment of the CARES Act on March 27, 2020.

Please note that the ability to take a loan is also subject to the specific NYU retirement plan’s loan policy, the type of loan, and the number of loans allowed. For those NYU plans that permit loans, participants are allowed a maximum of two outstanding loans at a time. View the Summary Plan Description for the NYU Retirement Plan for Members of the Faculty, Professional Research Staff, and Administration (PDF) and the NYU Supplemental Tax Deferred Annuity (STDA) Plan (PDF).

If you choose to take a loan, you will be asked to self-certify that you meet the requirements for a Coronavirus-related loan. The loan approval process will remain the same as it does for non-Coronavirus-related loans.

If you have existing retirement plan loan payments, you may be able to defer payments for one year and extend the term of your loan by one year.

3. Suspension of Required Minimum Distributions (RMDs) at Age 72

To help provide relief for those required to take RMDs, the CARES Act allows you to cancel your 2020 RMD payments and restart them in 2021.

  • If you already have an RMD payment scheduled for this year: You have the flexibility to cancel it, and TIAA will restart it automatically in 2021.
  • If you have already started receiving your RMD this year: You have the option to repay it as a rollover. If checks have already been sent, you have 60 days to roll over those funds into a plan that accepts rollovers or into an IRA.
  • If you have not set up your RMD this year: Based on the CARES Act, TIAA cannot set up new RMD payments.