Tax Legislation Requires Action

Earlier this year, we noted some important retirement plan changes brought about by the Tax Cut and Jobs Act of 2017 and by the Bipartisan Budget Act of 2018. The biggest impact of these is the upcoming change to ease the rules around hardship distributions, starting with the first day of your 2019 plan year. That’s January 1, 2019, for calendar year plans!

While this change may be good for participants, you must take action to be sure the plan is following the new rules on the first day of your 2019 plan year. Key operational changes that you may need to take include: 

·        Removing suspensions and allowing participants to start to defer again, as of the first day of your 2019 plan year

·        Updating your hardship approval process

·        Downloading new distribution and disclosure forms

Read our article to learn more about how the hardship rules have changed, what you must do operationally on the first day of your 2019 plan year, which forms have been updated, and to catch up on other changes from this legislation.