Amending a plan for Hardship Distributions

[Guest cc1898]

We have a retirement plan that allows participants to take a maximum of two hardship withdrawals. With news of the ecnonomy getting worse, there is some pressure to amend the plan and allow for three hardship withdrawals. I haven't seen anything which says there is a limit to number of hardship withdrawals. Anyone care to weigh in?

[Guest Kabert]

That's correct -- there's no statute/regulation that limits that number of hardship distribution a participant can take, so long as the plan allows it. The concern I've seen is that, if say 10 such distributions are allowed per year (hey, perhaps someone is constantly on the edge of being evicted, or they make monthly tuition payments), the participant starts to think of the plan as a bank account and it becomes an administrative hassle for the plan.