House Approves Bill to Help Pay Retirement Benefits


On April 23, the House of Representatives approved a $484 billion COVID-19 stimulus bill which incorporates funding that can be utilized to help pay retirement benefits. The novel legislation, titled the Paycheck Protection Program and Health Care Enhancement Act (H.R. 266, as amended) is the fourth in a series of bills addressing the economic and health hardships resulting from the current coronavirus pandemic. The Act offers an extra $320 billion to restore funding for the Paycheck Protection Program (PPP).

Funds disbursed under the PPP loan program are predominantly intended to help establishments stay afloat; nonetheless, they can be used to help pay for retirement benefits as well. PPP loans will be wholly forgiven when utilized for specific expenses, including payroll costs. Among other items, payroll costs contain “payment of any retirement benefit.” The Treasury Department indicated employer contributions to both DC plans and DB plans are encompassed in the classification of payroll costs when determining the greatest amount of a PPP loan.

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