The IRS issued a final rule in September 2019 that makes it easier for participants to take a hardship withdrawal. 它还限制了计划发起正规的购彩app下载的核查要求. The provisions take effect on January 1, 2020 and plans will need to be amended. The deadlines for the formal amendments will fall after the effective date and will vary based on type of plan.
- 取消暂停缴费六个月. This provision could potentially offset a portion of the “leakage” resulting from hardship distributions.
- Making the requirement for participants to take a loan prior to a hardship withdrawal optional. 因为这项规定是可选的, certain plan sponsors may elect not to adopt it in an attempt to mitigate “leakage.”
- 扩大可供分配的数量. Previously, only participant elective deferrals were eligible for a hardship distribution. The new rules also allow distribution of safe harbor contributions, QNECs and earnings. 这也是一个可选的条款.
- Permitting plan sponsors to rely on participants’ certification of their financial need and that they lack the financial resources to meet the need. This provision seemingly would be welcomed by plan sponsors as it eases the burden on them. 然而，该计划的发起者仍将有一些有限的要求.
- Adding an additional financial need safe harbor category related to federally declared disaster areas by the Federal Emergency Management Agency. This change will certainly be welcomed by participants in our location of Northern California.
While these new rules make it easier for participants to take hardship withdrawals, 它们仍应被用作最后的手段. One obvious drawback is that the withdrawal is a permanent reduction in the participant’s retirement savings. 也, the withdrawal is taxable and subject to a 10% early withdrawal penalty (for those younger than 59½). 如果可行的话，计划贷款是更好的选择. 除非贷款拖欠, there is no tax impact and the loan repayments go back into the participant’s account.
2020年, 雇员的401(k)最高缴款将增加500美元，至19美元,500 and the “catch up” contribution for those 50 and older will also increase by $500 to $6,500. The combined employer and employee maximum will increase by $1,000 to $57,000.