The Budget Act of 2018 allows plan sponsors to eliminate the mandatory six-month suspension of elective deferrals as well as the requirement to take a loan prior to seeking a hardship withdrawal. (Photo: Diego M. Radzinschi/ALM)
We can't predict the future, but sometimes the immediate past leaves enough breadcrumbs to show us a reasonably correct path.
Such was the case with the Budget Act of 2018 and the IRS Letter Ruling 201833012. These addressed the type and nature of hardship withdrawal rules corporate retirement plans can adopt. Plan sponsors need to be aware of the potential benefits and harm the opportunity to change the plan's rules may present to employees.
Christopher Carosa, CTFA, is chief contributing editor for FiduciaryNews.com, a leading provider of essential news and information, blunt commentary and practical examples for ERISA/401(k) fiduciaries, individual trustees and professional fiduciaries.
The Budget Act of 2018 allows plan sponsors to eliminate the mandatory six-month suspension of elective deferrals as well as the requirement to take a loan prior to seeking a hardship withdrawal. In addition, it increases available funds subject to hardship withdrawals. Together, these changes will allow employees easier access to more of their retirement savings well in advance of retirement.
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