Supplemental Security Inocme

Participant has a minor child with a disability that qualifies for SSI payments.  Participant has a small balance 401(k) that needs to be distributed so that resources are below the threshold.   Participant is only 35 so finding  a distributable event is difficult.  Has anyone had this situation?  The only potential distributable event that we have thought of so far is a hardship if their is a qualifying medical expense or perhaps amending the plan to facts and circumstances and qualifying this situation as a hardship irrespective of whether there is an event that would qualify under the safe harbor definition.

Thanks for any thoughts on this issue?  

So a person caring for a disabled child who is receiving SSI for such cannot save for retirement and have a meager 401(k) balance? What is wrong with this government? Give them enough to survive with public assistance and ensure that they will always remain on public assistance in retirement and, of course, these poor souls have no choice but to continue to vote those politicians into office or risk their primary means of survival. Those are my thoughts.

Suggestions - there should be sufficient medical expenses to substantiate a hardship withdrawal.

I agree I would look to medical expenses. 

21 minutes ago, CuseFan said:

So a person caring for a disabled child who is receiving SSI for such cannot save for retirement and have a meager 401(k) balance? What is wrong with this government? Give them enough to survive with public assistance and ensure that they will always remain on public assistance in retirement and, of course, these poor souls have no choice but to continue to vote those politicians into office or risk their primary means of survival. Those are my thoughts.

Suggestions - there should be sufficient medical expenses to substantiate a hardship withdrawal.

CuseFan in one sense I get your point but SSI disability isn't normal disability where you get it based on being disabled.  SSI is a poverty program that is limited to people with limited income and assets.  You either are or aren't in that group.  You do have to draw a line otherwise you will be giving poverty benefits to people with the means to care for themselves.  I don't have a problem helping those in need but I would like to limit it to those in need. 

Also check the plan document.  If it's not a prototype document, it's possible that hardship withdrawal events aren't limited to the six deemed hardship events listed in the 401(k) regulations.  I've seen many times where the employer thinks only safe harbor events are in the document but the document actually has both the general hardship test and the safe harbor events.

1 hour ago, MWeddell said:

Also check the plan document.  If it's not a prototype document, it's possible that hardship withdrawal events aren't limited to the six deemed hardship events listed in the 401(k) regulations.  I've seen many times where the employer thinks only safe harbor events are in the document but the document actually has both the general hardship test and the safe harbor events.

We came up with that same thought after I posted this. 

19 hours ago, ESOP Guy said:

You do have to draw a line otherwise you will be giving poverty benefits to people with the means to care for themselves.  I don't have a problem helping those in need but I would like to limit it to those in need. 

I fully agree - but to require someone to liquidate their meager retirement savings seems a bit draconian to me - unless maybe the person was deferring pay into the plan when they should not have been because they were getting SSI payments. I think this just highlights a huge dilemma we face in this country, how do you help people in poverty in a fair manner that enables them to escape poverty rather than ensuring they stay there? If I had the answer I probably wouldn't be ranting on BL would I?