Hardship distributions and partial plan terminations: The Covid-19 effect on employee benefit plans
Covid-19 has had a significant impact on the economy over the past year, including an impact on employee benefit plans. Hardship distributions and partial plan terminations are just two of those areas affected during 2020 that plan sponsors need to be aware of now.
Hardship distributions
Plans are allowed — but not required — to offer taxable, in-service hardship distributions to participants who demonstrate an “immediate and heavy financial need” that could be satisfied only by taking…