401(k) Plan Hardship Rules: Recent Changes to Loosen Requirements May Require Plan Amendments -

The Tax Cuts and Jobs Act (the “Tax Act”) and the Bipartisan Budget Act of 2018 (the “Budget Act”) made several changes which impact the 401(k) plan hardship distribution rules, and may require employers to amend their plans and/or administrative practices.

As a review, 401(k) hardship distributions are permitted only to the extent a participant has an “immediate and heavy financial need” and the distribution is “necessary” to satisfy such need. A 401(k) plan must specify how the plan administrator will determine that a participant has met the hardship requirements...