khn Posted April 23, 2014 Posted April 23, 2014 Is it mandatory to have a 6 month suspension of deferrals after a hardship withdrawal? A university plan has a custom document that is silent on the subject. To further complicate the question, some employees in the plan must make mandatory deferrals as a condition of employment. In that case, how can deferrals be suspended if they are deemed mandatory by the plan document?
QDROphile Posted April 23, 2014 Posted April 23, 2014 Not mandatory, but there is a different mandatory six-month suspension rule unrelated to the hardship distribution rules. The six-month suspension rules for hardships are for those who wish to suspend use of brains for hardship distribution administration.
My 2 cents Posted April 23, 2014 Posted April 23, 2014 Not a defined contribution practitioner, but I am having trouble making sense of the fact that the plan (a) requires participants to make mandatory deferrals as a condition of employment and (b) permits hardship withdrawals of those same deferrals. I have seen mandatory contributions to defined benefit plans as a condition of employment, but those plans tend to say that under no circumstances can there be any withdrawal of such contributions while employed. Always check with your actuary first!
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