The Internal Revenue Service will allow 401(k) plans and similar plans such
as 403(b)s to make loans and hardship distributions to victims of Hurricane
Katrina.
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Katrina through March 31, 2006, according to the IRS.
"Today's action will allow those devastated by Hurricane Katrina access
to much-needed money as they work to rebuild their lives," says Treasury
Secretary John Snow.
Meanwhile, the Department of Labor announced that it will not treat any person
as having violated the provisions of title I of the Employee Retirement Income
Security Act solely because they complied with the provisions of IRS announcement.
The IRS announcement, in conjunction with the DOL statement, expands the circumstances
under which hardship and loan distributions can be made from a plan to participants
and beneficiaries affected by the hurricane. The announcement also eliminates
the need for obtaining otherwise required documentation in advance of a hardship
or participant loan distribution.
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