Relief Needed on 403(b) Plan Hardship Distributions
ASPPA and NTSAA submitted a comment letter to the IRS on June 25, 2010 to request limited relief with respect to hardship distributions from certain 403(b) contracts.
Here’s an excerpt:
“Due to the recent economic downturn, there has been a significant increase in the number of requests for financial hardship distributions from contracts issued by ‘de-selected’ 403(b) providers under Revenue Procedure 2007-71. Compliance with the final 403(b) regulation standards to process a hardship distribution is problematic for ‘de-selected’ contracts. Consistent with marketplace practices prior to the final 403(b) regulations, the letter recommends that hardship distributions from ‘de-selected’ 403(b) contracts be permitted upon a participant’s certified statement as to the existence of the financial hardship provided certain other requirements are satisfied.”
Read the full comment letter here.
The American Society of Pension Professionals & Actuaries (ASPPA) is a national organization of more than 6,500 retirement plan and benefits professionals that serves as the educator, voice, and advocate for the employer-based retirement system. ASPPA members are administrators, actuaries, advisors, attorneys, accountants, and other financial services professionals who provide consulting and administrative services for qualified retirement plans. ASPPA is based in Arlington, Virginia, and has 17 regional ASPPA benefits councils (ABCs) providing local retirement plan employee benefit professionals with opportunities to participate in ASPPA activities in their local communities. www.asppa.org
The National Tax Sheltered Accounts Association (NTSAA) is the only independent, non-profit association dedicated to the 403(b) and 457 marketplaces in the nation and represents practitioners, agencies, corporate, and employer members. The NTSAA mission is to provide members with high quality education, technical support, and information resources, as well as to offer a professional networking forum. For more information, visit www.ntsaa.org.
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