Defination of princial residence for the purposes of a hardship withdr

[Guest Diane DuFresne]

The clients document elected the safe harbor "deemed Hardship" situations. One of these is payments necessary to prevent the eviction of the employee from his or her principal residence or foreclosure on the mortgage of that residence.

The employee is requesting a hardship distribution to prevent his eviction from an apartment. Can an apartment be his principal residence for the purposes of this rule?

Any thoughts would be appreciated.

Thanks,

Diane

[Guest dhp2]

Yes, it is fairly clear that an apartment can be a primary residence, and eviction (not just foreclosure) is expressly addressed in the Regulations: Treas. Reg. § 1.401(k)-1(d)(2)(iv)(A)(4) provides that “[p]ayments necessary to prevent the eviction of the employee from the employee's principal residence or foreclosure on the mortgage on that residence” will satisfy the safe harbor hardship requirement for a deemed “immediate and heavy financial need.”

The type of evidence required to establish the existence of this situation is, however, within the Plan Administrator's discretion to determine.

[E as in ERISA]

"Eviction" is a term generally used in relation to rental property (like an apartment).