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Do We Have to Provide New Paperwork When a Participant Requests a Second Distribution?

DWC 06/16/20
Facts When a participant requests a distribution from our plan, I provide them with a with a package that includes an election form and a bunch of other information.  A participant who terminated and took a distribution last year received an additional company contribution and, as a result, has additional money in her account and is asking for a ...
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Should We Make Up for Earnings Lost as a Result of a Delayed Distribution?

DWC 05/19/20
Facts Over the past several months, our turnaround times for normal business processes have lagged somewhat as we have adjusted operations in response to the various stay-at-home orders.  When participants in my 401(k) plan request distributions, I usually make them a priority and forward them along for processing by the next day at the latest.  ...
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Is There Any Coronavirus Relief for Participants Who Want to Postpone Plan Loan Payments?

DWC 04/14/20
Facts Several participants in our 401(k) plan currently have outstanding plan loans, and many others are looking to initiate them.  However, given the current pandemic, many participants are concerned that they won’t have the funds available to continue making payments right now.
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How Does the CARES Act Expand the Availability of Retirement Plan Loans?

DWC 04/7/20
Facts Our 401(k) plan allows participants access to their accounts via hardship distributions and, for those at least age 59 ½, via in-service withdrawals.  But with the economic uncertainty of the current environment, participants are now asking about taking loans from their plan accounts.
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Can We Allow a Distribution for a Coronavirus-Related Hardship?

DWC 03/31/20
Facts Some of our employees are dealing with financial challenges due to the coronavirus situation, and they are asking whether they can access their 401(k) accounts.  Our plan allows for loans and for in-service distributions at age 59 ½, but some of these employees are younger than that.  As a plan sponsor, I’ve always felt strongly that our ...
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Do We Still Need to Suspend Deferrals Following a Hardship Distribution?

DWC 02/25/20
Facts Larry and Kent are both participants in our company’s 401(k) plan.  Both recently went back to school on a part-time basis to pursue graduate degrees and will continue working for us.  Each of them took hardship distributions to help pay for tuition, Larry on September 18, 2019, and Kent on January 3, 2020.  Both of them would like to resume ...
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Do We Need to Continue Paying RMDs for a Deceased Participant?

DWC 02/18/20
Facts The CEO (and 5% owner) of our company passed away earlier this year at the age of 73.  He started taking his required minimum distributions right on time after reaching age 70 ½.  At the time of his passing, he was not married and had no children.  He also had not designated a beneficiary under the plan.
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Do 401(k) Loans Impact a Participant's Credit Score?

DWC 12/10/19
Facts Our 401(k) plan allows participants to take loans from their accounts.  We have a written policy that describes how the loans work and spells out the requirements that the plan and participants must follow.  Among other details, the loan policy indicates that payments must be made via payroll deduction.
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What is a Suspense Account and Can We Use Our Forfeiture Account Instead?

DWC 12/3/19
Facts The annual compliance report that our TPA provided to us indicates that we over-funded matching contributions for certain employees and instructs us to transfer the excess amounts out of the affected participants’ accounts and into a plan suspense account.  The only problem is that I am not sure what a suspense account is.  When I spoke to ...
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DWC News Update | Two Years in the Making: The Final IRS Hardship Distribution Regulations Are Here

DWC 10/24/19
It’s been a while, but we finally have them! Late last month, the IRS published the final hardship distribution regulations, nearly two years after Congress passed the Bipartisan Budget Act and the Tax Cuts and Jobs Act. The good news is that this final version follows the proposed version very closely. So closely in fact, that the IRS outright ...
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The views expressed in this blog are those of the authors and do not necessarily represent the views of any other person or organization. All content is provided for informational purposes only and is not intended to be tax or legal advice.