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ARTICLE · 27 NOVEMBER 2012

IRS Provides Disaster Relief For Plan Participants

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Plans that do not already contain loan and/or hardship provisions can also make loans or hardship distributions without formally amending the plan, provided that the plan is amended to provide for those loans or hardship distributions by the end of its plan year beginning in 2013.

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Jeffrey Ashendorf
Jeffrey Ashendorf
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Executive Summary:  In addition to the other various employee benefit plan relief provided as a result of  Hurricane Sandy, on November 16 the Internal Revenue Service announced, in Announcement 2012-44, that certain individual account plans, including Section 401(k) plans, Section 403(b) tax-sheltered annuities, and governmental Section 457(b) deferred compensation plans can provide plan loans and hardship withdrawals (including "unforeseeable emergency" distributions under 457(b) plans) to those participants who were (or who have certain family members who were) adversely affected by Hurricane Sandy. In addition, IRA owners may also qualify to receive distributions with reduced administrative procedures.

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