Brian Gallagher Posted March 28, 2003 Posted March 28, 2003 I know the regs say for a safe harbor hardship, all distributions and loans must be taken first. Someone told me that if a loan would be considered a burden itself, then it doesn't have to be taken and the participant can go ahead and take the h'ship without first having a loan. Is this true? Is it written anywhere? Your thoughts are appreciated as always. Remember: two wrongs don't make a right, but three rights make a left.
Mike Preston Posted March 28, 2003 Posted March 28, 2003 The boards seem to be reformatting cites, so I'll try a non-standard representation and see if it too gets mangled: 1.401(k)-1[d][2][[iii][[4]
Harwood Posted April 16, 2003 Posted April 16, 2003 1.401(k)-1[d][2][[iii][[4] states that you can bypass the loan IF "the effect would be to increase the amount of the need." Would that be limited to circumstances where taking a plan loan would increase the specific hardship being applied for? Or would that fact that paying back a plan loan would be a financial burden to the participant be enough to bypass taking the loan and move right to a hardship distribution?
Mike Preston Posted April 17, 2003 Posted April 17, 2003 A good argument can be made for the latter, if it is indeed the case.
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