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ARTICLE · 27 FEBRUARY 2018

Massive Budget Deal Includes Important Changes To Hardship Withdrawal Rules

Seyfarth Shaw LLP
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On Friday, February 9, 2018, the Bipartisan Budget Act of 2018 (the "Act") was signed into law by President Trump, ending a brief government shutdown that began at 12:01 a.m. on Thursday, February 8, 2018.

United StatesEmployment and HR
Sarah Touzalin
Sarah Touzalin
Kaley Ventura
Kaley Ventura
Randell Montellaro
Randell Montellaro
Jake Downing
Jake Downing
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On Friday, February 9, 2018, the Bipartisan Budget Act of 2018 (the “Act”) was signed into law by President Trump, ending a brief government shutdown that began at 12:01 a.m. on Thursday, February 8, 2018.  In addition to creating a two-year budget deal, the Act includes a number of important employee benefit changes – most notably to the hardship withdrawal rules for defined contribution plans – as generally described below.

Hardship Withdrawals

Effective for plan years beginning after December 31, 2018, the Act makes a number of changes to the rules governing hardship withdrawals from defined contribution plans (i.e., 401(k) and 403(b) plans).  Notably, the Act:

  • Directs the Department of Treasury to modify IRS regulations to remove the six month suspension requirement for employee contributions to all plans maintained by the employer following a hardship withdrawal. 

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