another safe Harbor 401(K)

[thepensionmaven]

Can hardship distribution be take from Employer 401K safe harbor contributions?

Document says yes but insurance company says IRS says no and will not allow.

[Guest Robin.Wolf]

Can hardship distribution be take from Employer 401K safe harbor contributions?

Document says yes but insurance company says IRS says no and will not allow.

Depends on the type of contribution and what the document provides. Safe harbor contributions used to pass the ADP test cannot be withdrawn, nor can QMACs and QNECs.

[Tom Poje]

"it's in there"

No hardships permitted on safe harbor contributions - see Notice 98-52 IV.H

[Guest Sieve]

In the SH regs, the ADP safe harbor contribution is either a QNEC or QMAC (Treas. Reg. Section 1.401(k)-3©). So, by definition, no hardship distributions are permitted on those QNECs or QMACs (Treas. Reg. Section 1.401(k)-1(d)(3)(ii)(A)). Any matching contributions which are not QMACs, but simply automatically pass ACP under IRC Section 401(m)(11), are OK for hardship distributions.