COVID-19: working through a time of change

In this period of unprecedented change, we've got the resources you need to understand new legislation, find help for your business, run virtual meetings, and navigate the new normal.

A message from Patrick Murphy, CEO, John Hancock Retirement

The CARES Act

The Coronavirus Aid, Relief, and Economic Security (CARES) Act was passed by Congress and signed into law by the President on March 27, 2020. This Act is the latest round of federal government support relating to the COVID-19 public health crisis and associated economic turmoil, and contains some significant retirement plan provisions. The CARES Act offers financial relief by temporarily relaxing the rules on three key provisions of qualified retirement plans. The Act permits:

Coronavirus-related distributions of up to $100,000 may be allowed in 2020 without penalty—for participants in eligible retirement plans—if they meet certain conditions. 

 

The relaxation of loan rules includes a temporary increase in the maximum loan amounts and a one-year extension to repayments due between March 27, 2020, and December 31, 2020.  
 

 

The 2020 RMD waiver would allow plans to suspend making required minimum distributions (RMDs) in 2020, and would apply to participants who turned age 70 1/2 in 2019 and had not yet received their 2019 distribution. 

 

Helpful resources for our business partners

Use these links to find help for small business owners, guidance from health authorities, and resources for retirement plan professionals.

COVID-19-related help from the U.S. Small Business Administration and the U.S. Chamber of Commerce

Go to the U.S. Small Business Administration website Go to the U.S. Chamber of Commerce website

Critical information from health authorities

Go to the Centers for Disease Control website Go to the World Health Organization website Use this directory of local health departments

Resources for third-party administrators from the National Institute of Pension Administrators (NIPA)

Read about COVID-19 with NIPA

Information from the Federal Emergency Management Agency (FEMA) on the government's response to the COVID-19 pandemic

Go to the FEMA website Get the facts on COVID-19 See how you can help

Virtual meetings fill the social distancing gap

Like many of you, most of us are working from home, but that doesn’t mean meetings stop—we just move them online.

How to go virtual with enrollment and education

There are several virtual options for educating participants and enrolling them in their plans: live and recorded webinars, one-on-one calls, multimedia and interactive online tools.

Reach out to your relationship manager to set up and run virtual education meetings and share our best practices. We're here to help!  

Use our prepackaged market dynamics education campaign 

Retirement savers need education and guidance now more than ever. Whether you have a John Hancock plan or not, you can use our prepackaged market dynamics campaign to run education meetings, with flyers in English and Spanish.  

Making retirement plans work—despite the uncertainty

We're continuously monitoring, measuring, adjusting, and responding to meet the changing needs of our financial professionals, plan sponsors, and participants.

Our continued commitment to service

We’re fortunate to have a robust suite of virtual tools that allows us to continue to work effectively with each other and our business partners. Our planning, preparation, and testing mean that we’re ready to meet our clients' expectations as we collectively work through the realities of a global pandemic. 

Read about our response to COVID-19 Read about our response to the CARES Act

Our continued commitment to community

John Hancock, Boston Athletic Association, Governor Baker and Mayor Walsh: Join us in turning the Commonwealth blue to thank the front lines  

Read the press release and access gratitude messages you can share

Participant activity amid the volatility

We understand retirement plan participants are nervous about their accounts, while plan sponsors are trying balance the needs of the business and its employees. We're doing what we can to remove obstacles to help plan sponsors manage their plans and to help participants access their money.

We’re also reaching out to our participants with guidance on navigating the market swings and providing them with education and guidance on our websites. Our website traffic is about 30% above expectations, with similar increases in our call volumes. 

We did a deeper dive to see what our 401(k) participants are doing amid the market volatility. What we found is that—although some people took action in response to the uncertainty—most people did not. 

No big uptick in calls, contribution changes, or loans 

  • Although call volumes into our participant service center haven’t increased over the last few months, coronavirus-related distributions (CRDs) and loans were among the top reasons for calls.¹
  • Only 3% of participants decreased their contribution rate in April. 
  • The number of participants taking loans from their 401(k) actually went down, compared to both March 2020 and April 2019. But the average loan amount went up 7%, to $12,433. 

Withdrawals are up sharply as people take advantage of CRDs 

With the CAREs Act going into effect at the end of March, April was really the first month anyone had access to a CRD. In April, and continuing in May, CRDs are driving a huge increase in withdrawals, as April withdrawals (CRDs and in service combined) are more than 200% greater than those taken in March 2020 or in April 2019. And as of May 12, CRDs in May have already surpassed the number taken in all of April.

Investments

We also see big changes in participants' investment behavior. Sixty-three percent more participants made changes to the types of investments in their 401(k)s this April compared with last April.  Some are seeking to capitalize on the down market and others are seeking shelter from the volatility. But overall, the number-one investment change in April was to sell stable value and diversify² with a mix of funds. 

The actions taken varied greatly by age group. Although the investments they chose within each strategy varied, generally, younger people stayed in the market and older people were more conservative. Even so, we saw almost as many people in their 50s and 60s moving out of as into stable value and fixed income—again showing that, while some are seeking shelter, others see potential opportunity in the down market. 

1 All data, unless otherwise indicated, is John Hancock’s internal data as of April 30, 2020.  Fund categories were defined as target-date fund, stable value/income, growth and income, equity, asset allocation, and other. A participant in more than two fund categories was labeled diversified. A participant who changed from more than two fund categories to greater than two other categories or to asset allocation alone was labeled as having rediversified. For complete information about a particular investment option, please read the fund prospectus. You should carefully consider the objectives, risks, charges and expenses before investing. The prospectus contains this and other important information about the investment option and investment company. Please read the prospectus carefully before you invest or send money. Prospectus may only be available in English.

Help with the new normal

Working from home? Managing a team remotely? It comes with extra challenges when everyone in your household is also home. We’ve got some best practices for the new remote workplace and some ideas to keep your kids busy.

Set yourself up for success 

Managing your team remotely?

  • Managing remote workers webinar from LEADx 
  • Tips for managing remote workers from LEADx
  • How smart leaders can help their teams navigate the global COVID-19 crisis webinar from Bates Communications   

 

And try socializing from a distance!

Schedule a virtual coffee klatch, water cooler conversation, lunch and learn, or happy hour with your favorite video conferencing app! 

Here's how we're keeping our kids occupied while we're all home together

Cook together!

  • Stage your own episode of Chopped with whatever you have in the pantry
  • Order pre-prepped recipes and make dinner as a family
  • Have each family member pick a night to cook or to choose the meal

And make clean up more fun with a dance party set to the kids' favorite music.  

Fun ways to reach out to the grandparents

  • Have the grandparents read bedtime stories on Facetime or a video call
  • Invite remote family members to play Words with Friends, Quiz Up, Fleet Battle, or any of your other favorite game apps
  • Host a trivia or Pictionary night with the cousins on your favorite video conferencing platform 

 

More digital resources for kids and families

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