Coronavirus Aid, Relief And Economic Security Act (CARES Act) Withdrawal Provision Adopted by the City of Costa Mesa
Participants of the City of Costa Mesa Deferred Compensation Plan are allowed to make withdrawals up to $100,000 from their account, if they meet one of the following qualifications:
- have been diagnosed with the virus SARS-CoV-2 or with coronavirus disease 2019 (COVID-19) by a test approved by the Centers for Disease Control and Prevention; or
- have a spouse or dependents diagnosed with such virus or disease by such a test; or
- have experienced adverse financial consequences stemming from such virus or disease as a result of:
- Being quarantined, furloughed or laid off
- Having reduced work hours
- Being unable to work due to lack of childcare
- The closing or reduction of hours of a business I own or operate
If participants meet the qualifications and take a distribution, the following tax-favored provisions apply:
- You will not be subject to early withdrawal tax penalties
- You can spread the tax liability on the withdrawal over the next three years
- You can repay all or a portion of the distribution within three years; the repayments are not subject to contribution limits and you are eligible for a refund on taxes paid due to the distribution
Things to consider before making the decision to sell investments to fund your withdrawals:
- It’s important to weigh all available options to address your immediate financial needs while being mindful of your future financial wellbeing.
- Downturns have historically been temporary. Investments typically rebound well before indications of a rebound in the economy and if you take yourself out of the market now, it may prevent you from benefitting from future upside.
To apply for a 457(b) Coronavirus-related Distribution, please download the form here.Download
Please submit your completed form to Warren Isenberg at firstname.lastname@example.org for processing.