Effective March 7, 2017, 403(b) plans may elect to use the "Summary substantiation method" for the six types of hardship distributions below.23, 2017, 401(k) plans may elect to use the "Summary substantiation method" for the six types of hardship distributions below. The employee isn't allowed to make elective deferrals to the plan for at least six months after the hardship distribution.The employee has obtained all other currently available distributions (including distribution of ESOP dividends under section 404(k), but not hardship distributions) and nontaxable (at the time of the loan) plan loans, including all other plans maintained by the employer.The distribution isn't greater than the amount of the immediate and heavy financial need, including the amounts necessary to pay any taxes resulting from the distribution.A financial need may be immediate and heavy even if it was reasonably foreseeable or voluntarily incurred by the employee.Ī distribution is automatically considered to be necessary to satisfy an immediate and heavy financial need if all of the following requirements are met:.Consumer purchases (such as a boat or television) are generally not considered an immediate and heavy financial need.The employer determines a participant has an immediate and heavy financial need based on the plan terms and all relevant facts and circumstances. Limited to the amount necessary to satisfy that financial need.Due to an immediate and heavy financial need.A distribution from a participant’s elective deferral account can only be made if the distribution is both: Although not required, a retirement plan may allow participants to receive hardship distributions.
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