Hardships from Prevailing Wage Plan

[JKW]

We have a prevailing wage plan and the document states that hardships can be taken but I have read that hardships are not allowed from Prevailing wage funds. Any thoughts?

[Lou S.]

I don't know the general answer to your question but I do know that often times Prevailing Wage contributions are used as QNEC to help with ADP testing. When this is done the PW contrib takes on the characteristics of a QNEC and become ineligible for hardship distribution.

[John Feldt ERPA CPC QPA]

Does the document define how the prevailing wage is to be counted? For example, as a QNEC (to help with the ADP test) or as an other "profit sharing" nonelective? If yes, then this will help you determine how it gets treated for in-service. But keep reading.

Are any non-prevailing wage contribution types offset by the prevailing wage contributions? If so, then the amount that is used toward the offset must be treated as the contribution type it is offsetting. For example, if the prevailing wage contributions are used to offset the 3% safe harbor nonelective, then the portion used to offset that SH requirement must be treated as a SH contribution for purposes of determining the restrictions for in-service distributions.

[JKW]

The prevailing wage contribution is the only contribution in the plan. No profit sharing, qnec or shne. SPD states "An in-service distribution is one that you receive while you are employed by the employer sponsoring this

plan. The primary purpose of the plan is to provide benefits to you upon your retirement; however, you may

receive an in-service distribution of all or part of your employer account on account of hardship. "