COVID relief bill could help some small-business 401(k)s

Small businesses that have laid off or furloughed workers this year may have one less worry, at least when it comes to their retirement plans, thanks to an emergency measure approved Monday by Congress.

Retirement savings provisions are scant in the Taxpayer Certainty and Disaster Relief Act, which is attached to the 2021 appropriations bill. But a short section of the legislation gives plan sponsors an extra three months of breathing room to avoid the consequences of partial plan terminations.

Normally, a reduction of 20% or more in a firm’s head count in a year can trigger partial plan terminations.

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