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ARTICLE · 01 OCTOBER 2019

Final Hardship Distribution Regulations, Part One: Key Changes And Deadlines For Plan Sponsors

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Last week, the Department of Treasury and the IRS issued final regulations regarding hardship distributions from 401(k) and 403(b) plans.

United StatesEmployment and HR
Paul Hamburger
Paul Hamburger
Jennifer Rigterink
Jennifer Rigterink
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Last week, the Department of Treasury and the IRS issued final regulations regarding hardship distributions from 401(k) and 403(b) plans. The final regulations respond to comments based on earlier proposed regulations and make a number of significant changes to the existing IRS rules that apply to hardship distributions.

Given the detailed material in the regulatory preamble as well as the final regulations themselves, we intend to release a series of blog entries analyzing the new rules for hardship distributions. Below is a summary of the issues raised in the final regulations that we will address in more detail in upcoming blog entries:

  • Plan Amendments/Plan Action Required: Individually-designed 401(k) plans that currently permit hardship distributions will likely need to be amended to reflect the final regulations by December 31, 2021 – but operational changes will be needed to comply with the new regulations by January 1, 2020. (Individually-designed 403(b)

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