IRS

IRS Proposes No Change for 2020 Retirement Plan Periodic Payment Withholding

The IRS has issued Notice 2020-3, guidance in which the Service is proposing no change for 2020 in a procedure for determining tax withholding on periodic distributions from pensions, annuities, and “certain other deferred income.”

Withholding on nonperiodic or on-demand distributions is generally applied at a 10 percent rate (other than retirement plan-eligible rollover distributions subject to mandatory 20 percent withholding), and can also be waived. Periodic—generally annuitized—payments have withholding applied according to IRS wage withholding tables, with recipients electing the number of withholding allowances or waiving withholding. However, when a withholding election is not made (on IRS Form W-4P), the current default assumption for the 2019 tax year is for the payor to apply withholding as if the recipient is married and has claimed three (3) withholding allowances.

The IRS is proposing in this guidance to retain this assumption for the 2020 tax year for those who make no withholding election for such periodic distributions, but is receiving public comments on this proposal through February 17, 2020.


IRS Seeks Continued Information Collection Authority

Today’s Federal Register contains an IRS solicitation of public comments on the agency’s request for continued authority to collect information on use of the Form 8809, Application for Extension of Time to File Information Returns. The form can be used by entities seeking an extension of time to file (with the IRS) certain annual information returns, including those that report transaction and account information for IRAs, employer-sponsored retirement plans, health savings accounts, medical savings accounts, Coverdell education savings accounts, 529 plans, and ABLE accounts.

Public comments on whether the IRS should have continued authority to collect information on use of this form must be received by the agency on, or before, January 31, 2020.


Federal Agency Health Care Price Transparency and Cost Sharing Rules Posted in Federal Register

A late posting in Wednesday’s Federal Register contains the official publication of guidance by several federal agencies with regulatory authority over elements of health care delivery. These include the IRS, the Department of Labor (DOL), and Department of Health and Human Services (HHS). This guidance is being issued in response to an Executive Order by President Donald Trump concerning health care price transparency and patient cost sharing. Members of Congress have also been vocal in requesting that steps be taken to equip citizens to become better informed consumers of health care services.

Cost-Sharing Proposed Regulations
The IRS, DOL, and HHS are jointly issuing proposed regulations under which group health plans and health insurance issuers in the individual and group health insurance markets would be required to disclose certain cost-sharing information.

The stated objective of these proposed regulations is to allow “…a participant, beneficiary, or enrollee (or his or her authorized representative) to obtain an estimate and understanding of the individual’s out-of-pocket expenses and effectively shop for items and services.” This information is to be made available on a website and—if requested—through non-Internet means.

These proposed regulations would also require health insurance plans and issuers to disclose in-network provider negotiated rates, and “historical out-of-network amounts through …machine-readable files posted on an Internet web site, thereby allowing the public to have access to health insurance coverage information that can be used to understand health care pricing and potentially dampen the rise in health care spending.”

Comments will be received for a 60-day period that begins with this publication. The document notes that all comments will be made public, and submitters are, therefore, warned not to include personally-identifiable information. Comments may be submitted electronically, by regular mail, or by express or overnight mail delivery.

Hospital Charges Disclosure Final Regulations
The HHS’s Centers for Medicare and Medicaid Services (CMS) has also issued guidance—these as final regulations—requiring hospitals operating in the United States to “establish, update, and make public a list of their standard charges for the items and services that they provide.” The effective date of these final regulations is January 1, 2021.

The guidance states that this action by the agency is “…necessary to promote price transparency in health care and public access to hospital standard charges” and that the public will thereby “have the information necessary to make more informed decisions about their care.”


IRS and DOL Identify Fall Regulatory Guidance Priorities

The IRS and the Department of Labor (DOL) Employee Benefit Security Administration (EBSA) have identified priority regulatory topics on their fall guidance agendas. These postings are not assurance that all items listed will be completed and issued within hoped-for timeframes, but serve as a general reference to the guidance these agencies are working to complete.

 

IRS

Proposed Rules

  • Guidance on Rules Applicable to IRAs Under Sections 408 and 408A
  • Spousal IRAs, SEPs, and IRA Technical Changes
  • Deferred Compensation Plans of State and Local Governments and Tax-Exempt Entities
  • Additional Rules Regarding Pension Plan Funding and Benefit Restrictions
  • Reporting and Notice Requirements for Deferred Vested Benefits Under Section 6057
  • Requirements for Employee Stock Ownership Plans
  • Application of Nondiscrimination Requirements, Backloading Limitations, Certain Plan Termination Rules, Benefit Limitations, and Top Heavy Rules to Statutory Hybrid Plans
  • Minimum Vesting Standards
  • Excise Tax on High Cost Employer-Sponsored Health Coverage
  • Health Reimbursement Arrangements and Other Account-Based Group Health Plans

Final Rules

  • Reporting and Notice Requirements for Deferred Vested Benefits Under Section 6057
  • Additional Rules Regarding Information Reporting of Minimum Essential Coverage (health plans)
  • Withholding on Certain Retirement Plan Distributions Under Section 3405(a) and (b)

 

DOL/EBSA

Proposed Rules

  • Fiduciary Rule and Prohibited Transaction Exemptions
  • Grandfathered Group Health Plans and Grandfathered Group Health Insurance Coverage

Final Rules

  • Adoption of Amended and Restated Voluntary Fiduciary Correction Program (VFCP).

 

 

 


IRS Proposes Updated Life Expectancy Tables for Retirement Arrangement Required Distributions

The IRS has issued a notice of proposed rulemaking and a notice of public hearing for updated life expectancy and distribution tables. The updated tables would be used in determining required minimum distributions (RMDs) from IRAs and employer-sponsored retirement plans. RMDs generally must begin when an individual reaches age 70½, or—in the case of some employer-sponsored retirement plans—when an individual retires and separates from service with the sponsoring employer. Beneficiaries may also take required payments based on the life expectancy tables after the death of an IRA owner or retirement plan participant.

The proposed guidance is a response to an August 2018, Executive Order by President Donald Trump directing the Treasury Department and IRS to revise existing guidance on such distributions, taking into account increased life expectancies in the population since final RMD regulations were last issued in 2002. A public hearing has been scheduled for January 23, 2020. Written or electronically-submitted comments must be received by a date 60 days from publication in the Federal Register (currently scheduled for tomorrow, November 8, 2019).

The notice of proposed rulemaking and public hearing can be found here.


Treasury Department Weighs in Informally on Hardship Amendment Deadline for Pre-Approved Retirement Plans

Treasury Benefits Tax Counsel Carol Weiser, speaking at the American Society of Pension Professionals and Actuaries (ASPPA) annual retirement industry conference this week, shared the IRS’ interpretation of when plans established on pre-approved documents—prototype or volume submitter—must be amended for changes to hardship distribution rules found the Bipartisan Budget Act of 2018.

The hardship distribution changes include an end to previous requirements that participants must take all available plan loans and suspend elective deferrals for six months, as well as broadening the contribution types—now to include earnings—that are available for hardship distribution. Some changes could be implemented in 2018 or 2019, and, while some changes are optional, all required changes must apply to hardship distributions taken on, or after, January 1, 2020.

Ms. Weiser indicated that all employers using pre-approved plan documents will have an extended amendment deadline tied to the sponsoring business’s tax return deadline. Specifically, Ms. Weiser stated that the amending deadline will be the tax return due date plus extensions for an employer’s tax year that includes January 1, 2020.

For example, a C corporation that operates on a calendar year would have a hardship distribution amendment deadline of April 15, 2021, 3½ months after the December 31, 2020, end of its business tax year (if no filing extension).

By comparison, a C corporation that operates on a fiscal year that ends January 31, 2020, would need to amend for the hardship distribution changes by May 15, 2020 (if no filing extension).

Ms. Weiser acknowledged that the earlier amendment deadline for employers with off-calendar tax years is not ideal considering the timing of the IRS’ final regulations, and that the IRS will further consider the issue.


Washington Pulse: New Guidance Simplifies Affordability Determination for ICHRAs

The IRS has issued proposed regulations that provide additional guidance to employers intending to offer an Individual Coverage HRA (ICHRA) for 2020 and beyond. The guidance confirms and clarifies the safe harbor provisions that were initially outlined in IRS Notice 2018-88. The proposed regulations are meant to 1) help employers determine whether their ICHRA is affordable, and 2) clarify the ICHRA nondiscrimination testing requirements.

 

Affordability

There are several reasons why an ICHRA may appeal to employers. For example, an ICHRA allows an employer to contribute a set amount to employees while reducing the employer’s risk of incurring unknown costs that may arise with traditional group health insurance plans.

A unique feature of the ICHRA is that it is flexible: there are no minimum or maximum contribution limits, so an employer can contribute any amount it chooses. But there are some restrictions. For example, an applicable large employer (ALE) that offers ICHRAs to its full-time employees must ensure that it is offering an “affordable” ICHRA. If the ICHRA is not affordable, then the employer must make a shared responsibility payment under Internal Revenue Code Section (IRC Sec.) 4980H(b). The payment is determined on a month-by-month basis. The monthly penalty amount is 1/12 of $3,860 for each full-time employee who receives a premium tax credit (PTC).

An ALE is defined as an employer who had an average of 50 or more full-time employees (including full-time equivalent employees) during the preceding calendar year. If an ALE offers an ICHRA to part-time employees only, the ALE will not be subject to the IRC Sec. 4980H(b) penalty if the ICHRA is not affordable. (The ALE must still offer affordable health coverage to its full-time employees or it could owe a penalty under IRC Sec. 4980H(a) or (b).) If the employer is not classified as an ALE, it will not be subject to the IRC Sec. 4980H(b) penalty, regardless of whether the ICHRA is considered affordable for employees.

An ICHRA is considered affordable for full-time employees if the monthly premium for single coverage under the lowest-cost silver plan offered on the Exchange in their rating area (where the employee lives) minus the monthly allowance is less than 9.78 percent of their household income. (On average, silver plans pay 70 percent of the costs for benefits that the plan covers.)

Determining affordability on this basis is difficult for employers: they may not know an employee’s household income and may not know where the employee currently lives. As a result, the IRS has provided safe harbors to ease the calculation for employers.

 

Safe Harbors

Instead of using individual employee calculations, employers may use the safe harbors when determining ICHRA affordability. Employers are not required to use all of the safe harbors when determining affordability. For example, employers could use the look-back month safe harbor and the affordability safe harbor, but disregard the location safe harbor when calculating affordability. Employers may also use the safe harbors when calculating affordability for all employees, or just when calculating affordability for a reasonable category of employees (as specified in the ICHRA final regulations). Employers must, however, always apply the safe harbors on a uniform and consistent basis for all the employees in a category.

Look-back month safe harbor

Although the ICHRA may appeal to some employers, there are a few drawbacks—including not knowing how much to contribute to an ICHRA. The Exchange generally does not determine premium costs until shortly before open enrollment begins on November 1 of each year. Employers must usually make benefit decisions well before this date. To help employers determine how much they will have to contribute before the beginning of the plan year, the IRS has developed the look-back safe harbor.

To determine the ICHRA’s affordability for the current year, this safe harbor allows a calendar-year ICHRA to use the cost of the lowest-cost silver plan offered on the Exchange in the employee’s rating area during January of the prior year (known as the look-back month). Employers maintaining noncalendar-year ICHRAs may also use this safe harbor, but the look-back month will be January of the current year.

Affordability safe harbor

When determining ICHRA affordability, employers must also take into account the employee’s household income. Prior guidance on affordability calculations has recognized that employers will not have this information—and have permitted an employer to use either a safe harbor based on the employee’s Form W-2 income, the employee’s rate of pay, or the federal poverty line.

When looking at the affordability safe harbors, remember that ICHRAs are funded solely by employer contributions. The term “HRA employee contributions” refers to what employees must pay for their insurance premiums in addition to what the employer must provide as an ICHRA contribution.

Form W-2 wages safe harbor: Under the Form W-2 wages safe harbor, the ICHRA is deemed affordable if the required HRA contribution for the employee does not exceed 9.78 percent (subject to cost-of-living adjustments) of that employee’s W-2 wages for the calendar year. This safe harbor allows an employer to use the employee’s wages entered in Box 1 of Form W-2.

The proposed regulations state that employers should not add back any W-2 reductions under IRC Sec. 36B (e.g., 401(k) or IRC Sec. 125 cafeteria plan contributions). When determining affordability, employers may not use Form W-2 wages from a prior year. They must use the current calendar year Form W-2 wages when determining affordability. This will require the employer to project the W-2 wages for each employee at the beginning of the current calendar year. If this proves to be to administratively difficult for the employer, the employer can use either the rate-of-pay or the poverty-line safe harbor described below.

Rate-of-Pay safe harbor: Under the rate-of-pay safe harbor, the ICHRA is deemed affordable for a calendar month if the required HRA contribution for the employee does not exceed 9.78 percent (subject to cost-of-living adjustments) of an amount equal to 130 hours multiplied by the lesser of 1) the employee’s hourly rate of pay as of the first day of the coverage period (generally the first day of the plan year), or 2) the employee’s lowest hourly rate of pay during the calendar month.

Example: If an employee earns $15 per hour, the employer should perform the following calculation.

$15 x 130 hours = $1,950

$1,950 x .0978 = $190.71

In this example, for the ICHRA to be deemed affordable, the required HRA contribution for the employee must be less than $190.71.

If the employee is paid on a salary basis, the ICHRA is still deemed affordable if the employee’s required HRA contribution for the calendar month does not exceed 9.78 percent of the employee’s monthly salary.

Federal poverty-line safe harbor: Under the federal poverty-line safe harbor, an applicable large employer member’s offer of ICHRA coverage to an employee is treated as affordable if the employee’s required ICHRA contribution for the calendar month does not exceed 9.78 percent of a monthly amount. This amount equals 1/12 of the federal poverty line for a single individual for the applicable calendar year.

Location safe harbor

When determining an ICHRA’s affordability, an employer must use the lowest-cost silver plan in the employee’s rating area. This requires the employer to know where the individual lives.

The IRS initially proposed a location-based safe harbor in Notice 2018-88, which allowed employers to use the employee’s primary work location for the area of residence. The IRS received numerous suggestions on how to simplify the calculation for employers while ensuring that employees would not be disadvantaged if premium costs varied widely in a small geographical area that was composed of different rating areas.

The proposed regulations conclude that the employer may generally use the primary site of employment where the employee will be reasonably expected to perform services on the first day of the plan year. The proposed regulations also address issues related to employees that change worksites midyear, who regularly work from home or in other remote locations, or who work only remotely.

 

Nondiscrimination Testing

The proposed regulations also provide more information on nondiscrimination testing.

The guidance found under IRC Sec. 105(h) prohibits discrimination in relation to benefits, in both plan design and plan operation.  To be nondiscriminatory in design, employers must provide uniform contributions to all participants, and amounts cannot vary based on age or length of service. If the plan fails this nondiscrimination requirement, the excess reimbursements become taxable to the highly compensated individuals (HCIs).

The ICHRA rules, however, provide certain exceptions to this nondiscrimination requirement. Contributions may increase based on the number of dependents covered and based on the participant’s age—as long as the oldest participants do not receive an amount greater than three times what the youngest participants receive. An ICHRA that follows these exceptions within each class of employees (as specified in the ICHRA final regulations) will not fail to meet the requirement to provide nondiscriminatory benefits as a matter of plan design.

Even if an ICHRA follows these exceptions, it may still be considered discriminatory in operation. If an ICHRA is discriminatory in operation and too many HCIs use the maximum ICHRA benefit, the excess reimbursements will become taxable to the HCIs.

Employers that have a large number of older employees who are HCIs may be concerned about failing nondiscrimination testing in relation to plan operations. Limiting ICHRA reimbursements may be a practical solution to testing concerns. This is because HRAs that reimburse only for premium costs (and are not permitted to reimburse for other 213(d) medical expenses) are excluded from the testing requirements of IRC Sec. 105(h).

 

The Take Away

The proposed regulations are consistent with the President’s goal of expanding HRAs in order to give employers and employees more options when purchasing health insurance. This guidance should simplify determining an ICHRA’s affordability and help employers avoid the shared responsibility payment. In light of the new proposed regulations, it is clear that the IRS is expecting employers of all sizes—including ALEs—to use the new ICHRA.

Ascensus will closely monitor any new developments regarding this guidance. Visit ascensus.com for future updates.

 

Click here for a printable version of this edition of the Washington Pulse.


2020 Taxable Wage Base Announced

The U.S. Social Security Administration has announced several 2020 benefit amounts that increase according to a cost-of-living-adjustment (COLA) formula. The adjustment that applies to tax-advantaged retirement savings arrangements is the Social Security taxable wage base (TWB), which will rise from $132,900 to $137,700 for 2020.

The TWB is the income level above which amounts are not withheld from earnings for Social Security benefit purposes. The TWB is used in certain retirement plan allocation formulas, notably for the allocation of some profit sharing and simplified employee pension (SEP) plan contributions. Such formulas are often referred to as “integrated” or “permitted disparity” formulas. Their use allows an additional benefit based on employee compensation above an integration level; one of the permitted integration levels is the Social Security TWB.

Potentially significant for other savings arrangements is the fact that IRS COLA-adjusted amounts for IRAs and employer-sponsored retirement plans for the coming year are often released very shortly after the Social Security Administration announces the TWB.


Washington Pulse: Hardship Distributions Made Easier

On September 19, 2019, the IRS issued final regulations that make retirement plan assets more accessible to those experiencing financial hardship. Released approximately 10 months after the proposed regulations, the final hardship distribution regulations address changes made by the Bipartisan Budget Act of 2018 (BBA) and satisfy a BBA provision directing the IRS to update its hardship regulations in general.

Among other things, the final hardship distribution regulations allow employers to broaden the employee contribution sources (including earnings) available for hardship distributions, and to grant a hardship distribution without first requiring the participant to take a plan loan. In addition, the regulations eliminate the six-month suspension of salary deferral and employee after-tax contributions (employee contributions) following receipt of a hardship distribution.

 

Hardship Distribution Overview

Retirement plan participants generally are prohibited from taking plan distributions unless certain events occur—such as separation from service or attainment of age 59½. But employers are permitted to design plans to allow participants experiencing financial difficulties to take hardship distributions.

Before receiving a hardship distribution, a participant must meet two conditions. First, the participant must have an “immediate and heavy financial need.” Second, the distribution must be necessary to satisfy that financial need.

The final regulations do not change how employers determine whether participants have an immediate and heavy financial need. Employers may still generally choose to use safe harbor rules (some of which changed under the final regulations) or may rely on “facts and circumstances.”

The final regulations do change how employers determine if a distribution is necessary to satisfy the financial need. Instead of relying on facts and circumstances, employers must now follow a general standard when determining if a participant has met this requirement.

The IRS adopted the final regulations with minimal changes from the proposed regulations. The highlights of the final regulations are discussed next.

 

The “Immediate and Heavy Financial Need” Safe Harbor Provisions

The final regulations make the following changes to the “immediate and heavy financial need” safe harbor provisions.

Federal disaster declarations

The final regulations add a safe harbor for “expenses and losses—including loss of income—incurred by the employee” in FEMA-declared disasters. Employers may apply this safe harbor to distributions taken on or after January 1, 2018. According to the IRS, this safe harbor expense differs from its previous disaster relief in three ways.

  • The safe harbor applies only to the participant’s losses and expenses (not to the losses and expenses of the participant’s relatives or dependents.)
  • Participants do not have a specific deadline by which to take a hardship distribution. And although the IRS does not have the authority to relax certain procedural requirements, employers may be more flexible when processing hardship distributions following a disaster.
  • An employer that chooses to wait until a disaster occurs to allow disaster-related distributions must amend its plan by the end of the plan year in which the amendment first applies.

This safe harbor is meant to end any uncertainty about accessing plan assets following a major disaster. As a result, the IRS and Treasury Department do not believe that future disaster-related announcements will be needed.

Repairing damage to principal residence

The Tax Cuts and Jobs Act of 2017 (TCJA) eliminated an income tax deduction for certain personal casualty losses for tax years 2018 through 2025 unless the losses were part of a federally-declared disaster. As a result, the availability of the safe harbor for repairing damage to a principal residence was severely limited. The final regulations remove the limitation imposed by TCJA for hardship distribution purposes, restoring the broad usefulness of this safe harbor.

Primary beneficiary safe harbor

This change aligns the regulations with an earlier law change that—plan permitting—includes the hardship of an employee’s primary beneficiary for medical, educational, or funeral expenses.

 

Determining Whether a Distribution is Necessary to Satisfy a Financial Need

The final regulations create a general standard for determining whether a hardship distribution is necessary to satisfy a financial need. Under this new standard, a hardship distribution must not exceed a participant’s need (including amounts to pay penalties and taxes), and the participant must not have any other way of meeting that need. To meet the second requirement,

  • the participant must take all other available distributions from the plan and from all deferred compensation plans of the employer,
  • the participant must represent that she has insufficient funds “reasonably available” to satisfy the financial need, and
  • the plan administrator cannot have actual knowledge that the participant’s representation is false.

The final regulations clarify that a participant can represent that she has insufficient funds even if she does have cash or other assets on hand—as long as she’s planning to use those assets on other future expenses (e.g., rent). The final regulations also clarify that in addition to a written representation, a participant can make a verbal representation through a recorded phone call.

 

Employers May Add Other Conditions, but Can’t Suspend Deferrals

In addition to the general standard described above, an employer may design its plan to require participants to meet additional conditions—such as taking a plan loan—before being eligible for a hardship distribution or requiring a nondiscriminatory minimum hardship distribution amount. Beginning January 1, 2020, however, an employer cannot require participants in a qualified plan, 403(b) plan, or governmental 457(b) plan to suspend employee contributions after receiving a hardship distribution.

While these three types of plans cannot suspend deferrals, the final regulations clarify that nonqualified deferred compensation plans may continue to include a suspension feature.

 

More Contribution Sources Available For Distributions

In addition to earnings on elective deferrals, other contribution sources in a participant’s 401(k) plan account may now be distributed for hardship reasons—including qualified nonelective contributions (QNECs), qualified matching contributions (QMACs), employer ADP safe harbor and QACA safe harbor contributions, and earnings on all of these amounts.

The new rules relating to hardship distributions also apply to 403(b) plans. However, earnings on 403(b) elective deferrals continue to be ineligible for hardship distribution and QNECs, QMACs, and other employer contributions continue to be unavailable in 403(b)(7) custodial accounts.

 

Other Issues

Using all safe harbor expenses not required

When determining if a participant has an immediate and heavy financial need, the final regulations clarify that employers may make available some but not all of the safe harbor expenses. The regulations also make clear that employers do not need to include all categories of individuals (e.g., primary beneficiaries) when determining who has a safe harbor expense.

Notice Requirements

The final regulations indicate that employers with ADP and/or ACP safe harbor plans must provide safe harbor notices that contain the hardship withdrawal provisions. If an employer’s current notice does not contain the new provisions, then the employer must provide an updated notice to eligible participants and provide participants with an opportunity to change their election.

 

Applicability Dates

The new hardship distribution rules apply to distributions taken on or after January 1, 2020, but employers may choose to apply the rules to distributions taken in plan years beginning after December 31, 2018.

The regulations allow employers to stop suspensions of contributions for hardship distributions taken in plan years after December 31, 2018. Employers may apply this rule as of the first day of the first plan year beginning after December 31, 2018, even if the hardship distribution was taken in the prior plan year (e.g., in October 2018.)

 

Amendment Deadlines

Although the amendment deadlines vary based on the type of plan document used, all amendments must apply to distributions taken no later than January 1, 2020.

At this point, the amendment deadline for pre-approved plan documents is unclear. Ascensus will provide updates as additional information becomes available.

The amendment deadline for individually designed plans (IDDs) depends on when the IRS includes the final regulations in the Required Amendments list. If the IRS includes the final regulations in the 2019 Required Amendments List, then employers must amend their IDDs by December 31, 2021.

For now, the 403(b) plan remedial amendment deadline is March 31, 2020. But the IRS and Treasury Department may issue separate guidance that provides for a later amendment deadline.

 

Next Steps…

Now that the final regulations have been released, service and document providers have begun analyzing the regulations with an eye toward updating their products and services. In the meantime, employers should become familiar with the revised hardship requirements and expect future amendments.

Ascensus will continue to monitor any new guidance as it is released. Visit ascensus.com for the latest information.

 

Click here for a printable version of this edition of the Washington Pulse.

 


IRS Issues Long-Awaited Final Regulations for Retirement Plan Hardship Distributions

Scheduled to be published in Monday’s Federal Register are IRS final regulations for hardship distributions from employer-sponsored retirement plans, including 401(k) and 403(b) plans. These regulations are chiefly a response to statutory changes affecting hardship distributions that were contained in the Bipartisan Budget Act of 2018.

The hardship-related changes in that legislation included the following.

  • Elimination of the (formerly) required 6-month suspension of employee elective deferrals following receipt of a hardship distribution
  • Allowing inclusion of employer-provided qualified nonelective contributions (QNECs) and qualified matching contributions (QMACs) and their earnings—as well as earnings on employee elective deferrals—in hardship distributions
  • Elimination of the requirement that available retirement plan loans be taken before the granting of a hardship distribution

Additional regulatory guidance on these changes—including required plan amendments—has been awaited since the legislation’s enactment and the IRS’ issuance of proposed regulations in November 2018.

Ascensus will continue to analyze these regulations. Stay tuned for additional information.