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If American retirement security is a quilt constructed of employer-sponsored retirement plans, then the pandemic is moth larvae. Financial distress caused by the coronavirus has made it necessary for out-of-work Americans to spend their savings and shuttered companies to cut costs to survive. Workplace retirement plans have been a source of savings and a target for cost-cutting.

In an effort to ease financial suffering, Congress passed the CARES Act in late March 2020. The legislation made it easier and less costly for Americans to take distributions from qualified retirement plans. It also authorized larger distributions than plans normally allow.

So far, it seems that relatively few participants jumped to take advantage of CARES Act provisions. An early May Forbes/You.gov poll reported that, overall, 5% of respondents had taken coronavirus-related distributions (CRDs) and 4% had taken loans from their plan accounts. The percentages were higher among younger participants with 8% of 25- to 34-year-olds taking CRDs and 11% taking loans. In June, the IRS expanded eligibility for coronavirus-related distributions. But, the number of people seeking hardship distributions and loans may be higher than the number who have received distributions, if companies are having difficulty processing large numbers of requests.