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Will Fewer Hardship Restrictions Produce More Hardship?

Roughly a year ago, the Bipartisan Budget Act of 2018 brought with it some “loosening” of the rules pertaining to hardship distributions, effective for plan years starting after Dec. 31, 2018. What effect has that had on plan design thus far – and what do you anticipate going forward?

Generally speaking, the changes made it easier for participants to get, and to get more, when requesting a hardship distribution – and many of the “penalties” associated with taking a hardship distribution (like a 6-month suspension of contributions, imposed to help ensure that the circumstances were truly a hardship, though some might argue they simply exacerbated the situation) are removed. Moreover, the criteria for hardship have also been expanded to include things like natural disaster casualty losses. (For details, see IRS Issues New Guidance on Hardship Distributions.)

This week, we’d like to know what changes, if any, you’re seeing. And what impact you think those changes might have in the days to come.

Reply to this week’s NAPA Net Reader Poll at

And – of course – we’ll have it all wrapped up for you on Friday.