What's New? 401(k) Hardship Distributions

New hardship rules became effective for calendar year plans beginning January 1, 2019.  Most of these rules are welcome changes which should make more funds available to plan participants who are experiencing financial hardship.  

The final regulations eliminate the requirements that plan participants take loans from the plan to the extent they are available before they are permitted to take a hardship distribution from the plan and that participants may not make new contributions to the plan within six months of the hardship distribution. They also change the casualty loss hardship distribution rules for disaster relief and the rules for determining the amount of plan funds available for distribution, while clarifying the requirement that funds not be available from other sources. 

Read more in The Gold Book.