DTH

Unforeseeable Emergency WDs in 401(a)

Recommended Posts

DTH    0

A governmental employer has a 457(b) plan that permits unforeseeable emergency withdrawals. They also have a 401(a) plan that matches deferrals from the 457(b) plan. The 401(a) plan wants to allow for unforeseeable emergency withdrawals. Is this permitted? I have only seen hardship withdrawals permitted in these plans. Thanks,

Share this post


Link to post
Share on other sites

A hardship withdrawal stamdard is actually a more lenient standard than unforeseeable emergency. It allows for things like tuition, purchase of a home, etc., which are foreseeable.

A governmental 401(a) plan can allow for the more lenient hardship withdrawal standard. If it wanted to, it could allow for only unforeseeable emergency withdrawals--nothing prevents you from not allowing withdrawals at all, or imposing a stricter standard than the law requires. It's just a question of them not wanting to.

Edited by Carol V. Calhoun

Share this post


Link to post
Share on other sites

Create an account or sign in to comment

You need to be a member in order to leave a comment

Create an account

Sign up for a new account in our community. It's easy!

Register a new account

Sign in

Already have an account? Sign in here.

Sign In Now