401(k) Q&A | Plan & Industry Content From DWC - The 401(k) Experts

How Does the CARES Act Expand the Availability of Retirement Plan Loans?

DWC 04/7/20

DWC 401(k) Q&A Question of the Week: How Does the CARES Act Expand Availability of Plan Loans?

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.

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 ...

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 ...

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.

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.

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 our ...

DWC News Update | Two Years in the Making: The Final IRS Hardship Distribution Regulations Are Here

DWC 10/24/19

In the News_Blog Header Image_IRS Final Hardship Distribution Regulations_10.24.2019

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 ...

How Do I Calculate How Much Money is Available for a 401(k) Loan?

DWC 09/24/19

Facts The participants in my company’s 401(k) plan are regularly inquiring about how much money they have available for a loan. When I report back the amount available to them, it’s not unusual for me to hear groans and exclamations from them that “this is my money” (particularly if they’re disappointed they aren’t able to access more). I know ...

Uncashed Distribution Checks? The IRS Provides New Guidance...Sort Of

DWC 08/15/19

Uncashed Distribution Checks_DWC News Update_8.15.2019_blog header image

Just about anyone who has dealt with a 401(k) plan – either as a plan sponsor or a service provider – for any amount of time has had to deal with the issue of participants not timely cashing plan distribution checks. There are all sorts of potential concerns that range from tax implications to fiduciary responsibilities, but neither the IRS nor ...

Are We Required to Force Former Employees to Take Their Money Out of Our Plan?

DWC 04/23/19

Facts We just received our year end testing and it mentioned that we have several terminated participants with small balances that we are required to distribute from the plan. I remember seeing something in one of our documents that mentioned distributions for account balances below $5,000, but I’m not entirely sure what that means or how I’m ...

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