by Marie Wilson
on March 6, 2019
Did you hear about the legislative changes to 403(b) hardship distributions? NBS has all the information you need to ensure that you have the most up to date information regarding the recent changes to 403(b) hardship distributions.
First, the change is primarily due to the “Tax Cuts and Jobs Act” and the “Bipartisan Budget Act of 2018.”
Effective January 1, 2019, changes to the 403(b) hardship distributions include:
By removing these prior requirements, this not only eases the burden in the time of hardship, but allows you, as the participant, to access your 403(b) retirement account, resulting in a qualified distribution.
To expand further, the qualifying distributable events that would allow you to take a 403(b) safe-harbor hardship distribution remain unchanged and include:
These qualifying events may require proper documentation to be submitted. Your investment provider may require its own paperwork in addition to the NBS hardship distribution form. Once all paperwork has been completed, you may submit all forms to NBS for review and approval.
The Plan and the IRS define certain circumstances that can qualify for a hardship distribution from the Plan if you have exhausted all other sources of assets. As a general rule, documentation should be current, dated, unpaid, and as descriptive as possible.
With NBS as your TPA, your employer’s plan documents will be amended by 2020 for the recent hardship changes. NBS is prepared to help your plan stay in compliance, while allowing for maximum flexibility. Should you have any questions, please refer to the FAQ sheet here or the NBS website here. You may also contact NBS by phone at 1(800)274-0503 option 5.