The Treasury Department and IRS have just published final regulations on hardship distribution options – along with some changes, and clarifications, from the proposed version. This week, we’d like to know what the response has been, if any, among your plan sponsor clients.
You’ll recall (certainly now) that the Bipartisan Budget Act of 2018 directed the Secretary of the Treasury to “modify §1.401(k)-1(d)(3)(iv)(E) to (1) delete the 6-month prohibition on contributions following a hardship distribution and (2) make any other modifications necessary to carry out the purposes of section 401(k)(2)(B)(i)(IV).” You may also recall that on Nov. 14, 2018, the Treasury Department and the IRS published proposed regulations regarding hardship distributions. And, of course, late last week, the final regulations were published.
For the most part, the final regulations followed the path blazed by the proposed version (the IRS/Treasury characterized them as “substantially similar to the proposed regulations”).
That said, the reality that the regulations are now – a reality – and the inevitable press coverage around the new, more liberal hardship restrictions suggests that plan participants, if not your plan sponsor clients, will soon be either making changes, or asking questions about making changes, or perhaps both.
This week, we’d like to know what you’re hearing – and doing – with regard to these new hardship regulations. You can respond to this week’s NAPA-Net Reader Poll at https://www.surveymonkey.com/r/7GS9G96.
And we’ll have it all sorted out for you on Friday!
