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HARDSHIP DISTRIBUTIONS FOR 401(K) PLANS

HARDSHIP DISTRIBUTIONS FOR 401(K) PLANS

The Bipartisan Act of 2018 became effective for 2019 Plan years. Among other things, the Act proposed new regulations in relation to hardship distributions for 401(k) Plans including:

  • Participants are no longer required to suspend elective deferrals for the 6 months following the hardship distribution, unless it specifically states in the Plan document to suspend the elective deferrals.
  • Permits amounts previously contributed as qualified non-elective or qualified matching contributions to be available as a hardship distribution.
  • Removed the requirement to take available Plan loans prior to requesting a hardship.

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