Tag: hardship withdrawals

Compliance February 10th, 2022

A Reminder to Avoid Fraudulent Hardship Withdrawals

An individual in Ohio was recently indicted by a grand jury on charges that he fraudulently claimed the assets he withdrew from his retirement account would be used to purchase a primary residence and to pay medical expenses.

February 19th, 2021

Coronavirus Hardship Withdrawals, Taxes and Your Retirement Plan Clients

Coronavirus-related withdrawals made in 2020 were a financial lifeline for some, but they could also turn into a major tax headache for others.

December 18th, 2020

The Year in Hardship Withdrawals and Leakage

Recordkeepers say their worst fears about plan leakage during 2020 have not come to pass, and in fact, the vast majority of participants have stayed the course.

Trends

Warn Your Clients

Sponsors face hard choices about COVID-19 hardship withdrawals.

Servicing Strategies

Compliance When It’s Tough

Advisers should scope out any plan errors to keep their clients on course.

Compliance June 19th, 2020

IRS Expands Coronavirus Loan, Distribution Relief

The Internal Revenue Service is expanding the categories of individuals eligible for special loans and distributions and providing updated guidance on the tax treatment of these distributions and loans.

Data & Research June 17th, 2020

What Constitutes Retirement Plan Leakage, Really?

Depending on how exactly one defines the term, estimates of 'leakage' from defined contribution retirement plans vary considerably.

June 11th, 2020

Warn Your Clients: Don’t Abuse Coronavirus Hardship Withdrawals

Though retirement plans can allow individuals to self-certify that they qualify for a penalty-free coronavirus-related distribution, should the IRS discover otherwise during a future audit, a participant can be subject to substantial penalties.

Client Service May 28th, 2020

In Times of Stress, Timely Communications Make a Big Difference

New data shows the education and guidance firms are providing is helping individuals to stay the course.

Trendspotting

Hardship Withdrawals Climb 40%

The Bipartisan Budget Act is seen as the catalyst

Client Service July 29th, 2019

Helping Participants After They Have Taken Hardship Withdrawals

Participants who have taken a hardship withdrawal are nearly three-times more likely to feel “always” stressed in general and three-times more likely to have “a lot” of stress about their financial situation.

Compliance July 1st, 2019

Simplified Hardship Withdrawal Process Can Still Go Wrong

The IRS is aiming to simplify the hardship withdrawal process, but plan sponsor clients still have to remain mindful of their compliance obligations and safe harbor requirements.

Client Service May 31st, 2019

Hardship Withdrawals Spiked, Loans Dipped After Bipartisan Budget Act

The Bipartisan Budget Act of 2018 made it easier for retirement plan participants to access hardship withdrawals without taking loans first; since passage of the law, hardships withdrawals are up 40% in Fidelity’s book of business.

Data & Research May 3rd, 2019

Average Deferral Rates Reach 10-Year High of 8.6%

And the use of 401(k) loans fell to a nine-year low of 22.5% in 2018, according to T. Rowe Price’s annual participant data benchmarking report.

Data & Research February 21st, 2019

Participants Remained Committed to Their DC Plans During 2018

In the first three quarters of 2018, only 2.2% of participant stopped contributing to their plans, ICI data shows.

February 6th, 2019

Assessing Likely Impacts of IRS Hardship Withdrawal Rule Changes

New rules established by Congress and the IRS simplify the process for participants to request a hardship withdrawal of DC plan assets; some experts say this could increase “leakage,” while others anticipate more positive effects, such as lower debt among cash-strapped participants.

September 21st, 2018