Hardships under 403b7

[austin3515]

Corbel's adption agreement doens't let you elect hardship distribution for non-deferral balances under a 403b7 contract, but DOES allow it under 403b1. Can anyone shed some light on why that is?

[John Feldt ERPA CPC QPA]

See Treasury Regulation §§1.403(b)-8(d)(2)(ii) and/or 1.403(b)-6©.

[John Feldt ERPA CPC QPA]

1.403(b)-6©:

Distributions from custodial accounts that are not attributable to section 403(b) elective deferrals. --Except as provided in §1.403(b)-4(f) (relating to correction of excess deferrals) or §1.403(b)-10(a) (relating to plan termination), distributions from a custodial account, as defined in §1.403(b)-8(d)(2), may not be paid to a participant before the participant has a severance from employment, dies, becomes disabled (within the meaning of section 72(m)(7)), or attains age 591/2. Any amounts transferred out of a custodial account to an annuity contract or retirement income account, including earnings thereon, continue to be subject to this paragraph ©. This paragraph © does not apply to distributions that are attributable to section 403(b) elective deferrals.

[austin3515]

And why, pray tell, are there different restrictions depending on the funding vehicle? Anyone? This is a strange new world (403b's)indeed...

[TLGeer]

And why, pray tell, are there different restrictions depending on the funding vehicle? Anyone? This is a strange new world (403b's)indeed...

Blame Congress for this one. The statute is pretty clear.

Tom Geer