QNEC and QMAC Eligible for Hardship Withdrawal

[LCARUSI]

Question posted by HOCKEYAMY:

I am getting differenting opinions and of course I can not get a clear read from the code regs

Do you think the QNEC and or QMACs are eligible for hardship withdrawal?

[Alan Simpson]

I believe that if a plan so provides, QMACs and QNECs that were used to satisfy the ADP test, and income allocated to those contributions, are available for a hardship withdrawal. However, this only applies to those amount credited to the participants account prior to any plan year ending before July 1, 1989.

[Guest Destruo]

I agree with Alan. According to Announcement 93-105, as a general rule, QNECs, QMACs and accrued gains "may NOT be distributed on account of hardship. The regulations permit a plan to provide a grandfather rule for interest, QNCs and QMACs accrued prior to December 31, 1988, (or if later, the end of the last plan year ending before July 1, 1989)."