As part of the budget agreement signed By President trump on February 9, some additional provisions have been added including changes to the hardship provisions for retirement plans.
The legislation requires the Internal Revenue Service to change its guidance and allow employees taking hardship distributions from a retirement plan to continue contributing to the plan without a six-month suspension. The revised regulations will apply to plan years beginning after Dec. 31, 2018.
The legislation also changes the rules relating to hardship withdrawals from 401(k) plans to permit employers to extend hardship distributions to amounts not previously permitted (QNEC and QMAC contributions). It also would remove the requirement that forced a participant take a loan before taking a hardship withdrawal. The provision applies to plan years beginning after Dec. 31, 2018.
