PLANADVISER - March/April 2020 - 9

EARLY
ECONOMIC
REACTIONS
Extraordinary Measures
The SEC's relief package helps advisers keep operating,
while the CARES Act eases access to retirement savings
WASHINGTON produced several relief
measures in late March that address the
impact of COVID-19 on the economy,
including the retirement
industry. The
Securities and Exchange Commission
(SEC)'s relief package to support fund
managers and investment advisers and
the Coronavirus Aid, Relief and Economic
Security (CARES) Act help on two fronts.
63%
of Americans are
worried about negative
effects on their
retirement savings as
a result of COVID-19.
SEC Chairman Jay Clayton says the
impact of the coronavirus outbreak may
delay or prevent funds and advisers operating
in affected areas from meeting
certain regulatory obligations. This could
be due to restrictions on large gatherings,
travel and access to facilities; the
potential limited availability of personnel;
and similar disruptions. Thus, the relief
package is designed to enable funds and
advisers to meet those obligations and
continue doing business, while recognizing
that there may be temporary disruptions.
In terms of adviser-focused relief provisions,
flexibility is granted for the preparation
and filing of Form ADV. Further
flexibility is granted for the delivery of
amended brochures, brochure supplements
or summaries of material service
changes going to clients. The market regulator
also passed rules permitting investment
advisers and investment companies
to conduct virtual board meetings.
Firms and financial professionals
affected by the coronavirus are encouraged
to contact the SEC with questions
and concerns. Clayton says the commission
" may extend the time period for relief,
with any additional conditions it deems
appropriate, or provide additional relief as
circumstances warrant. "
Congress, too, has acted, taking a
step to support investors-and
major
the broader U.S. economy-through its
passage of the CARES Act. The economic
stimulus package includes strategies to
support individuals, families, small businesses
and Fortune 500 companies alike.
On the retirement planning front, the
law permits limited early withdrawals
and higher loan amounts from retirement
accounts. Other provisions detailed
in the stimulus legislation waive required
minimum distributions (RMDs) when
there has been too little time to recover
losses. Another allows for targeted,
penalty-free access to retirement accounts
for those hit directly by the health crisis.
Retirement plan experts expect that
many Americans will take advantage of the
relief provisions. According to new survey
data provided by LendEDU, 63% of Americans
are worried about negative effects
on their retirement savings as a result of
COVID-19, including 67% of those ages 55
and up. At the same time, 57% of Americans
are worried about meeting monthly
mortgage payments, including 96% of
those recently unemployed. Not surprisingly,
the latter group were more worried
than Americans overall about keeping up
with student loan payments and credit
card payments: 88% vs. 63%, and 93% vs.
54%, both respectively. -John Manganaro
Fed Aids
Money Markets
One of the federal
government's responses
to the coronavirus
outbreak will be to
temporarily guarantee
money market funds-
mirroring what proved to
be an important policy
decision made during
the Great Recession.
Joblessness
New weekly jobless
claims jumped in the
third week of March to
a record 3.28 million-
outstripping by several
times the worst weeks of
the Great Recession.
Spike in
401(k) Trades
With the markets
plummeting due to
the coronavirus, 401(k)
investors recorded one
of the busiest five-day
stretches in the 20-yearplus
history of the Alight
Solutions 401(k) Index.
Web Traffic Up
Empower Retirement
reports that participant
web traffic is up 10%
since the spike in market
volatility began in late
February.
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PLANADVISER - March/April 2020

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