401(k) Hardship

[abanky]

In determining the amount available for a hardship withdraw, what sources are available to be used?

Example. A participant has a vested balance of 5000, consisting of 80% salary deferral + gains and 20% employer match + gains. The participant has a need for all of the vested balance. Now Is 5000 available to withdraw? or Is 4000 available (only salary deferral)? or Is 4000 minus the gains on investment available?

Thanks,

Andrew

[Guest SueJ]

Your basic plan document should spell out what is permitted to be withdrawn. I'd check there.

[lkpittman]

The 401(k) hardship rules apply only to deferral money; however, the plan may be written so that matching contributions (and earnings thereon) may be withdrawn under the same circumstances, as well. With respect to the earnings on the deferrals, earnings may be distributed only if they were credited to the participant's account prior to 12/31/88.

[QDROphile]

Be careful about the match if the plan has a safe harbor design for the match. The IRS appears to believe that the match cannnot be withdrawn while in service on account of hardship.