This article was co-authored by Legal Assistant Toni Tardy.
This article discusses changes to hardship rules contained in the Bipartisan Budget Act of 2018.
On February 9, 2018, Congress passed the amended Bipartisan Budget Act of 2018. This Act contains some effects on retirement plans and hardship distribution, in particular.
This two-year budget agreement will make retirement funds more accessible to participants. Effective for plan years beginning after December 31, 2018, the Act will ease rules on hardship distributions by removing (1) the requirements to first exhaust all other options by taking a loan from the plan; (2) the prohibition on withdrawing certain employer contributions and investment earnings; and (3) the requirement to suspend participant contributions for six months after the hardship. For the first time, qualified nonelective contributions (QNECs), matching contributions (QMACs), contributions made to stock bonus plans or profit-sharing plans, safe harbor contributions, plus earnings on all contributions, are now all up for grabs.
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