Available for Hardship after loan

[legort69]

Simple example:

Plan allows loans and hardship only from employee deferrals (no gains).

EE contributes 10,000, balance is 12,000.

Received a loan for 50% VB, or $6,000 total.

EE qualifies for a $10,000 hardship (for example).

I compute that the EE can receive $6,000 in hardship. 

Agreed?

 

 

[mphs77]

Disagree here.

 

Since loans can be funded only from deferrals (at least that's how I read the set up), the loan was from the deferral account

so of their 10,000 in deferrals they have already received $6,000 of it (remember no gains), leaving only $4,000 left for the hardship.

[ETA Consulting LLC]

27 minutes ago, mphs77 said:

Disagree here.

 

Since loans can be funded only from deferrals (at least that's how I read the set up), the loan was from the deferral account

so of their 10,000 in deferrals they have already received $6,000 of it (remember no gains), leaving only $4,000 left for the hardship.

And I, respectfully, disagree with you.  The hardship basis of $10K doesn't change when the loan is issued.  So, they are eligible for a $10K hardship to the extent that amount is still available in the deferral source.  So,  since $6,000 is all that is left, then they can take that in the form of a hardship.

Good Luck!

[MoJo]

19 minutes ago, ETA Consulting LLC said:

And I, respectfully, disagree with you.  The hardship basis of $10K doesn't change when the loan is issued.  So, they are eligible for a $10K hardship to the extent that amount is still available in the deferral source.  So,  since $6,000 is all that is left, then they can take that in the form of a hardship.

Good Luck!

What he said....

[CuseFan]

Agree with E and I think the wording, albeit a little vague/confusing, was saying that only for hardship were gains excluded, at least that's how I interpreted.

[RatherBeGolfing]

And I agree with ETA, MoJo, and Cuse... I believe we have enough for a quorum 

[stephen]

On 9/1/2017 at 4:09 PM, ETA Consulting LLC said:

And I, respectfully, disagree with you.  The hardship basis of $10K doesn't change when the loan is issued.  So, they are eligible for a $10K hardship to the extent that amount is still available in the deferral source.  So,  since $6,000 is all that is left, then they can take that in the form of a hardship.

Good Luck!

What he said