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ARTICLE · 13 APRIL 2017

IRS Will Now Permit DC Plan Hardship Withdrawal Self-Certification Summaries

McDermott Will & Emery
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Two recently published memoranda by the Internal Revenue Service (the IRS) indicate that it is permissible for 401(k) and 403(b) plan sponsors and their third party administrators (TPAs) to rely on participants' written summaries describing their financial hardships when processing hardship withdrawals from plans that apply the safe harbor event rules

United StatesEmployment and HR
Nancy Gerrie
Nancy Gerrie
Erin Kartheiser
Erin Kartheiser
Maggie McTigue
Maggie McTigue
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Summary

Two recently published memoranda by the Internal Revenue Service (the IRS) indicate that it is permissible for 401(k) and 403(b) plan sponsors and their third party administrators (TPAs) to rely on participants' written summaries describing their financial hardships when processing hardship withdrawals from plans that apply the safe harbor event rules. Plan sponsors and TPAs may find relief from the former time-consuming, manual reviews of participants' hardship withdrawal documentation.

In Depth

The Internal Revenue Service (the IRS) recently published two memoranda to IRS examinations employees indicating that it is permissible for 401(k) and 403(b) plan sponsors and their third party administrators (TPAs) to rely on participants' written summaries describing their financial hardships when processing hardship withdrawals from plans that apply the safe harbor event rules. To use this method, the plan sponsor or TPA must confirm that the participant has

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