Self-Certification of Hardship Distributions

Good afternoon, I hope all is well with everyone.  I know Secure 2.0 had initially said that Hardship Distribution could be self-certified.  Was that pushed back, though?  I just want to make sure, as we had a client that had adopted that strategy, but I think we may need to backtrack.  I just want to be sure.

Thanks in advance!

Internal Revenue Code of 1986 § 401(k)(14)(C) now reads:

Special rules relating to hardship withdrawals

For purposes of paragraph [401(k)](2)(B)(i)(IV)—

(C)  Employee certification

In determining whether a distribution is upon the hardship of an employee, the administrator of the plan may rely on a written certification by the employee that the distribution is—

(i)   on account of a financial need of a type which is deemed in regulations prescribed by the Secretary to be an immediate and heavy financial need, and

(ii)  not in excess of the amount required to satisfy such financial need, and

that the employee has no alternative means reasonably available to satisfy such financial need. The Secretary may provide by regulations for exceptions to the rule of the preceding sentence in cases where the plan administrator has actual knowledge to the contrary of the employee’s certification, and for procedures for addressing cases of employee misrepresentation.

Congress has not enacted anything to repeal or amend that statute.

This self-certification change applies to plan years that began or begin after December 29, 2022.