Each year, most organizations and their retirement plan fiduciaries must go through their annual 401(k) (or 403(b)) audit. Employee retirement plans are heavily governed by the Department of Labor (DOL) and Internal Revenue Service (IRS); and, the retirement plan audit makes sure that all the work involving the Plan was done correctly throughout the year, and if it wasn’t, identify the proper steps are taken to fix things and implement controls to prevent issues in the future.

As you continue to navigate the second half of this unprecedented year, we want to provide you with an update on the most important legislative changes enacted in 2020 thus far that directly impact you and your employees. The following information will help you gauge the changes to the retirement, employee benefits, and employer-sponsored retirement plan landscape throughout this year to ensure you are aware of what you are responsible for as an employer and/or committee member. In addition to discussing the items managers and HR executives should be aware of in terms of their organizations’ employees’ well-beings, financial lives, and benefits, I’ll also shed light on the overall state of retirement in this COVID-19 environment and explain how challenges can also create opportunity for long-term investors.

When thinking about today’s markets, it’s helpful to reflect on the old adage, “Don’t judge a book by its cover.” Keep these words in mind as we take a look at the traditional S&P 500 Index, the market-capitalization-weighted index of the 500 largest publicly traded companies in the U.S.

Financial Wellness is by no means a new idea, but this year its need is beyond measure. Today, many Americans are struggling with their day-to-day finances: Studies show that nearly 76% of employees are living paycheck-to-paycheck; 29% say they deal with personal financial issues on the job – often for two to three hours a week, and 70% of companies who have financial wellness programs don’t have formal measurements to assess the value of those programs.

Developing a plan to re-active your workspace will be challenging and complex. You must determine which workers need to come back first, develop a phase-in period for welcoming them back, and adjust your workspaces to adequately reflect and implement social distancing guidelines, and overall and most importantly, provide a safe and healthy environment for your employees to work in.

Earlier this year, at the end of March, the CARES Act was passed into law with broad legislation around stimulating the economy and providing some stability to businesses, households, and individuals during the COVID-19 health pandemic. Within the CARES Act, there are provisions that impact both companies and organizations that offer retirement plans to their employees. Here, we’ll identify how these changes come into play as we move throughout the year, what these key provisions mean for retirement plans, and the administrative oversight these new provisions necessitate from employers.

In the new normal of our COVID-19 economy, it seems like it’s business as usual (with a slight twist) for some and a complete disruption to the normal business cycle for others. We frequently discuss the performances of various market indexes in our market updates; but for this commentary, we focus on breaking down what’s happening within the various sectors that comprise the S&P 500 Index – the primary U.S. market index – to provide you with a better understanding of how the markets are anything but business as usual.

The coronavirus pandemic has placed unprecedented challenges on employers, as we have seen companies being forced to implement layoffs and furloughs and navigate financial constraints from decreased revenues and profits. It has become clear that the COVID-19 health crisis has brought and will continue to bring significant economic disruption, which means that employers need to confront the challenges related to their 401(k) plans. Many organizations have been coming up with ways to prudently manage their budgets and expenses, and one topic that deserves attention is the flexibility surrounding changes to employer-sponsored retirement plans with respect to the employer match, profit-sharing, and discretionary contributions.

It was another tough week for the markets – rehashing the numbers merely magnifies the pain, so let’s leave it at that. A positive to acknowledge: The U.S. economy entered this period of uncertainty from a position of strength. The economy was robust, the unemployment rate, at 3.5%, was at historic lows, the consumer balance sheet was strong, and consumer debt service – after years of refinancing – was at modern-era lows. We shudder at the thought of what the damage to the economy would have been if we had had to battle this pandemic in 2009 while our economy was suffering in the aftermath of the credit crisis. This outbreak is an external factor penetrating the economy; it is not a by-the-book recession that involves the economy bubbling and bursting internally with a grim recovery outlook due to the issues stemming from weak fundamentals. Fundamentals were strong and trending positive before this acute event, meaning, from an economic standpoint, we are in a position to weather this storm, regain strength, and eventually recover.

We want to take a moment to address the extreme selling that has transpired in the markets throughout the last few days and weeks. It’s too early to say if yesterday’s capitulation-style selling signaled a market bottom, and it is too early to predict what the resulting short-term and long-term damage to the domestic and global economies will be. Our view is that most industries and sectors will recover from the coronavirus sell-off, while the industries that have been most directly impacted by the virus – hospitality, transportation, and tourism – will face a prolonged recovery. The timing and degree of recovery is first and foremost dependent on the spread and subsequent containment of the virus.