IRS Updates Operational Compliance List for Qualified Retirement Plans
The IRS has published its Operational Compliance List for 2019, which reflects legislative or regulatory changes that may impact the administration of qualified retirement plans. Generally, plan amendments incorporating items on the Operational Compliance List will not be required until the end of the second plan year after the IRS includes the item on a Required Amendments List.
The items included for 2019 on the Operational Compliance List are as follows:
◦Available loans. Participants are not required to take all available loans prior to obtaining a hardship distribution.
◦Sources available. Available sources have been expanded, which now include earnings on 401(k) contributions.
◦6-month suspension. Participants taking a hardship distribution are no longer required to be suspended from making 401(k) contributions for 6 months. Effective for plan years beginning after December 31, 201, plans will not be permitted to suspend a participant’s elective contributions following a hardship withdrawal.
◦Casualty loss. Plans do not need to incorporate the changes to Section 165 of the Code limiting the casualty loss deductions to losses from a federally-declared disaster area for a hardship event.
◦Participant representations. For hardship distributions made after 2019, plans will be required to obtain a representation from the participant that the distribution is necessary to satisfy a financial need.
The Operational Compliance List is available at: https://www.irs.gov/retirement-plans/operational-compliance-list.