Hardship casualty losses

[austin3515]

Are people applying the new rules regarding casualty losses that it has to be in a declared disaster area?

It seems bazaar and likely to be corrected soon.  In the meantim if someone's house burns down, are people telling that participant they are not eligible for a hardship? (assuming the fire was started by lightning strike in a regular storm).

[RatherBeGolfing]

2 hours ago, austin3515 said:

Are people applying the new rules regarding casualty losses that it has to be in a declared disaster area?

It seems bazaar and likely to be corrected soon.  In the meantim if someone's house burns down, are people telling that participant they are not eligible for a hardship? (assuming the fire was started by lightning strike in a regular storm).

I wouldn't bet on it being corrected anytime soon.  While it was clearly an unintended consequence, fixing it does not appear to be much of a priority, or at least that is what I have been told...

In the meantime, if the sponsor is really wants to get around the issue they could always amend the plan to not use the safe harbor provisions.  Its not like we cant do it, we just cant do it using the safe harbor.

[Peter Gulia]

Of the casualty claims (without a declared disaster) possibly allowable under the earlier deemed-need rule or under a "facts and circumstances" need, one wonders how many of them incorrectly state that the need cannot be relieved through insurance?

 

[RatherBeGolfing]

11 hours ago, Fiduciary Guidance Counsel said:

Of the casualty claims (without a declared disaster) possibly allowable under the earlier deemed-need rule or under a "facts and circumstances" need, one wonders how many of them incorrectly state that the need cannot be relieved through insurance?

That is a good point.  I can imagine that there are many participants out there who would rather take a hardship than make a claim against insurance out of fear of cancellation or skyrocketing premiums.  Even with an insurance claim, the deductible can be crippling.