I sponsor a 401(k) Plan for myself and my staff. I recently processed a hardship distribution for the purchase of my primary residence in October 2018. I know the rules require me to suspend my deferral elections for six months following a hardship distribution, but I recently came across an article that said I don’t have to impose the suspension anymore. I’d really like the opportunity to continue deferring if I am allowed.
We have an employee who attained age 70 ½ earlier in 2018 and will retire by the end of 2018. However, she has agreed to enter into a contract to provide services to our firm and will be reclassified as an independent contractor on December 1, 2018.
We have a non-owner participant in our 401(k) plan who is age 74 and retired in 2014. That means that he has already been taking required minimum distributions for the last few years. We just recently rehired him in October 2018. Now that he is re-employed he has inquired as to whether he can suspend his RMDs this year.
One of the non-owner participants in our 401(k) plan will be turning 70 in April of next year (2019). That means she will reach age 70 ½ in October and will need to start taking required minimum distributions. The participant knows her first RMD is due no later than April 1, 2020, but she has asked whether she has to wait that long to actually withdraw the money.
One of the participants in our 401(k) plan submitted a request for a hardship distribution for the purchase of a primary residence. On review of the supporting documentation, we discovered that the purchase has already occurred and that the requested distribution is to cover the cost of renovations prior to moving in.
One of the participants in our 401(k) plan heard from a friend that it is possible to take money out of a plan while still employed. I’ve always heard that age 59 ½ is the rule of thumb as to when in-service distributions are allowed, but this participant is only in her mid-40s. She has about $100,000 in the plan: $65,000 in employee deferrals, $25,000 in safe harbor matching contributions, and $10,000 in profit sharing.
Our company sponsors both a 401(k) plan and a cash balance plan. One of our employees is a strong supporter of a local charity. She does not have a spouse or children, so she would like to name the charity she supports as her beneficiary for both of our retirement plans.
We just discovered that one of our employees has been stealing money from the company for quite some time. We fired him as soon as we discovered the theft, and we are working with the police and our attorney to determine what recourse we have. The employee has enough in his 401(k) account with us to cover most of what he stole, but he has submitted a request to take a distribution from the plan.
A participant in our 401(k) plan recently took a hardship distribution. We know we are supposed to suspend his deferrals for six months following the distribution, but we are not entirely clear on how strict that timing is and what happens at the end of the six months.
One of our employees who was a participant in our 401(k) plan recently passed away. He never submitted a beneficiary designation form; however, since he was married, we understand that his spouse is automatically his beneficiary. According to his spouse, there are enough other assets such that she does not want to accept the death benefit from the 401(k) plan and prefers, instead, that the benefit pass to her brother-in-law (her deceased husband’s brother).
Get our 401(k) and defined benefits content delivered directly to your inbox.
As Featured In
