Hurricane Harvey and Hurricane Irma 403(b)/457 Hardship Distributions and/or Loans

September 15, 2017

The Internal Revenue Service announced on August 30, 2017 that employer-sponsored retirement plans can make hardship distributions and/or loans to victims of Hurricanes Harvey and Irma and members of their families.

What this means for participants:

If your principal residence or place of employment or the principal residence or place of employment of a son, daughter, parent, grandparent or other dependent was located in one of the affected areas designated by FEMA for individual assistance (https://www.fema.gov/disasters) on August 23, 2017, you are allowed to take a hardship distribution or loan for assistance with any expense related to Hurricane Harvey or Hurricane Irma until January 31, 2018.

There are now specific elections on your Plan’s Distribution Form (https://tcgservices.com/documents/#/search) that will allow you to elect a hardship distribution or a loan for expenses related to Hurricane Harvey or Hurricane Irma.

If you elect to receive a hardship distribution from your account for expenses related to Hurricane Harvey or Hurricane Irma, your contributions will be suspended for six (6) months following the hardship distribution. However, according to the IRS announcement, you may now elect for your contributions NOT to be suspended following the hardship distribution.

PLEASE NOTE:

TCG Administrators will rely on the self-certification from an employee or former employee as to the need for and the amount of the hardship distribution, unless TCG Administrators has actual knowledge to the contrary.

In general, the normal spousal consent rules still apply for any loans or hardship withdrawals and any hardship distribution made will still be includible in gross income and generally subject to the 10% early withdrawal penalty (unless you are 59 ½) in the 403(b) plan.

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