The Bipartisan Budget Act of 2018 law changed provisions related to hardship distributions. Some changes are required, some are optional. ARS will amend your plan for required changes and work with you on the optional changes.
Effective January 1, 2020 the following changes will occur:
REQUIRED
- Elimination of the 6 month contribution suspension following a hardship distribution.
- Participants must certify the financial necessity.
- Change allowed reason for a hardship to include a casualty loss of any kind that can be claimed on a personal tax return.
OPTIONAL
- Elimination of loan required before a hardship distribution.
- Expand money types to include Safe Harbor, QNEC and QMAC.
- Include earnings from employee contributions.
- Add allowed reason for a hardship to include expenses in a federally declared disaster area (even if no loss was incurred).
If you have any questions, please do not hesitate to contact your ARS Plan Administrator.