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

Can Employees from a Former Subsidiary Take a Distribution from our 401k Plan?

DWC 03/12/19

QOTW - 3.12.2019 - Can Employees from a Former Subsidiary Take a Distribution for our 401k Plan - Plan Distributions and MandA

Facts Our company has several wholly-owned subsidiaries, and each of them has signed onto our 401(k) plan as participating employers. We sold 100% of the stock of one of those subsidiaries – Glen’s Fiddich, LLC – to an unrelated company. As a result of the sale, Glen’s Fiddich is no longer related to us and has discontinued participation in our ...

Plan Loans & Past Participants: What Happens to a Participant's Loan Balance When They Terminate Employment?

DWC 03/5/19

QOTW - 3.5.2019 - Plan Loans and Past Participants - Plan Distributions

Facts We have a participant who took a loan from his 401(k) account at the beginning of the year. Yesterday, he gave us notice of his resignation, effective in two weeks, but he still has an outstanding loan balance.

Hardships & Hurricanes: What are the Hardship Rules Following a Natural Disaster?

DWC 12/18/18

QOTW - 12.18.2018 - Hardships and Hurricanes_What are the Hardship Rules Following a Natural Disaster_Plan Distributions

Facts Our company sponsors a 401(k) plan. One of our participants lives in the Florida panhandle and lost her home in Hurricane Michael. She is under age 59 ½ and is not eligible to take in-service withdrawal, and a loan would only impose a greater burden. I’ve not seen any direct guidance that permits hardships distributions for those affected by ...

Are We Still Required to Suspend Deferrals Following a Hardship Distribution?

DWC 12/11/18

Facts 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 ...

Are RMDs Required for a Retiree Turned Independent Contractor?

DWC 11/27/18

This QOTW has been updated to reflect changes made by the SECURE Act, which was signed into law on December 20, 2019. Participants who were born on or before July 1, 1949, are required to start taking their RMDs in the year they turn 70 ½. Those born after that date are subject to RMDs on reaching age 72. Facts We have an employee who attained age ...

Breaking News: Hardship Distributions Becoming Even Less of a Hardship Than Previously Expected

DWC 11/13/18

Hardship Regulation Update_11.13.2018_Blog Header Image

Nearly a year after Congress passed changes to the hardship distribution rules in the Bipartisan Budget Act and the Tax Cuts and Jobs Act, the IRS has published proposed regulations to fill in some of the details on how to implement the new rules.

Can We Suspend RMDs for a Rehire?

DWC 11/13/18

Can a Participant Get a Jump on RMDs & Start Taking Them a Few Months Early?

DWC 11/6/18

QOTW - 11.6.2018 - Can a Participant get a Jump on RMDs and Start Taking Them a Few Months Early - Plan Distributions

What Costs can be Covered Under a Hardship Distribution for Purchase of a Primary Residence?

DWC 10/30/18

Facts 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.

Can In-Service Distributions be Taken Prior to Age 59 1/2?

DWC 10/23/18

QOTW - 10.23.2018 - Can In Service Distribtuions Be Take Prior to Age 59.5 - Plan Distributions

Facts 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 ...

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