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401k Hardship
Benefits & Compensation
401k Hardship
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A Hardship can be taken for tuition, education related fees, etc. for the next 12 months of post secondary education for the employee, or his or her spouse or dependents. Okay if someone wants to take
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401k Hardship

posted at 8/17/2010 8:07 AM EDT
Posts: 198
First: 5/6/2006
Last: 8/29/2011
A Hardship can be taken for tuition, education related fees, etc. for the next 12 months of post secondary education for the employee, or his or her spouse or dependents. Okay if someone wants to take a single hardship for the current fall tuition, AND the following spring tuition, what on earth do you request to substantiate the spring semester? Not knowing for sure the tuition, the classes that will be taken or the books needed?
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401k Hardship

posted at 8/26/2010 10:40 AM EDT
Posts: 2442
First: 2/12/2000
Last: 9/14/2011
First check all the plan rules for hardship withdrawals and make sure this hits all the requirements. For example are you sure this is for secondary education. Can you verify the current semester fees etc.

Then it would be a reasonble determination by the Plan Administrator to allow an amount that was two times as much as the first semester plus an amount for inflation. You cannot expect to be perfect but you are expected to do what a reasonable person would do given the fiduciary requirements.

If the requestor has a suggested amount ask them what it is based on and if you agree it is reasonable.

You will of course remind them that this is a taxable event and you will withhold as necessary.
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401k Hardship

posted at 8/31/2010 7:16 AM EDT
Posts: 198
First: 5/6/2006
Last: 8/29/2011
Thank you Howard. There is nothing in our plan regarding hardships other than of course the fact that we allow them...based on all IRS regs. It amazes me that I can get an extra semester or two of funds for education hardships...when one can't even be sure the student will still even be in school, however you cannot get an extra month's rent or house payment under the "avoid eviction" allowable reason.
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