Complying With Hardship Withdrawal Rules Makes Retirement Plan Administration Easy (Well, Easier, Anyway)

In a February 2018 article, my colleague Kathleen Dreyfus Bardunias encouraged retirement plan sponsors to implement annual "operational checkups" in order to ensure their plans were administered in compliance with the plan's terms and applicable law. That article described various retirement plan administration errors that review might uncover, including: failing to timely deposit employee contributions, failing to provide required notices, and plan loan failures.

While the prior article didn't specifically explore errors in the administration of hardship withdrawals, the recent IRS guidance and legislative changes discussed below show that this is an area where both plan sponsors and participants may still have questions.