In August, the Public Retirement Research Lab (PRRL) surveyed recordkeepers about public sector implementation and use of CARES Act loan and distribution provisions, as well as participant saving and investment behavior during the pandemic.
Recordkeeper survey respondents represented approximately 75,000 public sector DC plans and more than 10,000,000 participants as of July 2020.
Among key findings from the survey:
- COVID-19 related distributions (CRDs) rose steadily from April to July, when they reached 47%. Some respondents reported that virtually all of the plans on their system had taken CRDs, while other reported a nominal amount.
- On a monthly basis, less than 1% of state and local DC plan participants took CRDs, with an average distribution of between $11,542 and $12,952.
- The prevalence of deferred loan repayments implemented by state and local plans was considerably greater than the implementation of higher loan maximums throughout the period observed.
The data indicate that public sector defined contribution participants have largely stayed the course with very few utilizing the CARES Act provisions. Although, when distributions have been taken, they are relatively large, which is concerning. The question remains: Will we see a rise in distributions as we near the end of the year?
Click below to download the key survey takeaways.