Rhinebeck Bank 401(k) Plan
Notes to Financial Statements
As of December 31, 2020 and 2019 and for the year ended December 31, 2020
Vesting
Participants are immediately vested in their contributions and the Bank’s safe harbor contributions and discretionary contributions plus actual earnings thereon. Vesting in the Bank’s matching contribution is based on years of continuous service. Participants are 100% vested after five years of credited service (20% for each year of service).
Notes Receivable from Participants
Participants may borrow from their fund accounts a minimum of $1,000, up to a maximum equal to the lesser of $50,000 or 50% of their vested account balance. The notes are secured by the balance in the participant's account and bear interest at rates that range from 4.25% to 9.25% at December 31, 2020. Interest rates are set at the prime rate plus 1%. Principal and interest is paid ratably through bi-weekly payroll deductions. Terms range from one to five years or greater for the purchase of a primary residence. Only one loan outstanding is permitted at a time.
Pursuant to the Coronavirus Aid, Relief, and Economic Security Act (the CARES Act), Plan participants could request a delay of note repayments for repayments that occurred between March 27, 2020 and December 31, 2020 for one year. Subsequent payments were re-amortized and included any interest accrued during the period of delay. The ability to request a delay in note repayments under the CARES Act ceased as of December 31, 2020.
Notwithstanding the above, for the limited period beginning on March 27, 2020 and ending on September 22, 2020, for qualified individuals impacted by the COVID-19 pandemic, the loan limit was increased from $50,000 (maximum of 50% of vested account balance) to $100,000 (maximum of 100% of vested account balance).
Payment of Benefits
On termination of service due to death, disability, retirement, or other reasons, a participant will receive a lump-sum payment equal to the value of the participant’s vested interest in their account. The Plan also allows hardship withdrawals, if certain criteria are met.
Pursuant to the CARES Act that was signed into law on March 27, 2020, participants who were currently receiving required minimum distributions were offered the option to waive their 2020 distribution and participants who were due to receive the first required distribution in 2020 had their distribution automatically waived. The ability to request special waivers with respect to required minimum distributions under the CARES Act ceased as of December 31, 2020.
Additionally, the CARES Act permitted Plan participants to request up to $100,000 in coronavirus-related distributions, with repayment terms of up to three years. The ability to request coronavirus-related distributions under the CARES Act ceased as of December 31, 2020.