Skip to main content

You are here


The Impact of Coronavirus


We are getting reports from a number of our members that employers—struggling with the impact of business closings, a lack of customers, or other economic impacts due to the pandemic—are looking for some help. Based on results to a member survey, the impact could be catastrophic!   

The American Retirement Association has been hard at work, lobbying aggressively for funding relief (see ARA Crafts Proposal to Provide Retirement Plan Funding Relief for Small Businesses, ARA Presses for Retirement Plan Relief in Coronavirus Stimulus Bill and ARA Pushes for Plan Filing Relief Due to Coronavirus Impact), and with good reason. 

As an alternative to termination, we’ve been discussing legislation that would permit employers to halt their contributions for the remainder of the year. On Friday, we asked ASPPA members for their help in assessing the potential impact.

The Results

We received 111 survey responses to our survey, and the vast majority (79%) of the TPAs and recordkeeper respondents noted that their small business clients had already approached them with concerns about plan termination/contribution funding. Most (93) of the respondents indicated that they primarily worked with plans with less than $10 million in assets.

Among the survey respondents, approximately one in three (28%) indicated that 1%-10% of their small business clients were candidates for plan termination as a consequence of the corona pandemic (e.g., reduction in sales, reduced employee counts, reduced hours, forced closures), while another 17% placed that impact at 11%-20% of their current clients. In sum, nearly half estimated that somewhere between 1% and 20% of their plans would be a candidate for plan termination.

The Potential Impact

However, more than one in five (22%) estimated that it would impact more than 100 of their small business clients. A weighted average of those results indicated that 41.59% of their small business clients could be impacted.

Applying that weighted average, according to year-end 2017 Form 5500 data, there are 662,000 DC plans, 571,000 401(k) plans. According to the most recent EBRI/ICI data, approximately 90% of those have less than $10 million in assets—and, extrapolating the findings above, nearly 42% of those plans—approximately 216,000 plans (571,000 * .90 * .42) might be candidates for plan termination as a consequence of the corona pandemic.

That’s right—based on the survey results, it’s reasonable to assume that more than 200,000 small business retirement plans are potentially at risk of termination.

Stay tuned. We may need your help. 

P.S. The survey is still open. Please continue to respond to our survey at