Reason For Hardship Withdrawal

[Guest ROB VIDOVICH]

A 401(k) Plan allows for hardship withdrawal due to

1. Medical expenses

2. Purchase of Principal Residence

3. Tuition

4. Costs Preventing Eviction or Foreclosure from a Primary

Residence.

5. Such other costs or expenses deemed to be immediate heavy financial needs in accordance with Treasury Regulation Section 1.401(k)-1(d)(2)(iii)(A) and (B)

A participant is out of work due to injury at work and is waiting for his court hearing for workmans comp. He has used all of his personal income outside of the plan to keep up on his bills. He has no other source of income at this time and will be past due on his mortgage, but he has not yet received any notice of eviction or foreclosure. He does have other bills he has due utilities and I'm sure credit card dept. He is not receiving any income from the company at this time. Would he qualify under Item 5 above in any way??????

Please let me know as soon as possible....

[doombuggy]

Items 1- 4 that you listed are the "safe harbor" reasons. Perhaps the other one (#5) falls under the "facts & circumstance." I would check the actual regulation that you are quoting, so see if he can get some $$.

[ccassetty]

You will also want to check the plan document. If it is using the safe harbor rules, then number 5 is not available until such time as congress sees fit to add it to the safe harbor list of allowable reasons for hardship. If the plan is not a safe harbor plan, then #5 may be available. Look at the plan document.

[MWeddell]

If you're summarizing the plan language, it sure doesn't sound like there is a hardship withdrawal event yet.