401(k) Hardship Withdrawals effective January 1, 2005: Equity-League Fund

401(k) Hardship Withdrawals effective January 1, 2005

Effective January 1, 2005 the Board of Trustees have elected to add to the Equity-League 401(k) Plan a Hardship Withdrawal feature to the withdrawal options that are currently available under the plan. Participants will have the option to access their Salary Reduction Account (Deferral Contributions) balance if a hardship situation arises. The Internal Revenue Service, and the Plan define a "hardship" as follows:

Expenses for Medical Care for yourself, spouse, or dependent.
Purchase of Primary Residence excluding mortgage payments.
Tuition and Related Education Fees including room and board expenses, for the next 12 months for post-secondary education for yourself, spouse, or dependent.
Prevention of Eviction or Foreclosure on your primary residence.

As of January 1, 2006, the final regulations by the IRS have been expanded to include:

Funeral expenses of parents, spouse, children and dependents.
Certain expenses relating to the repair of damage to the employee's principal residence such as hurricanes or flood damage.

These six rules under the Safe Harbor provision will now be used for determining hardship withdrawals under the Plan.

Before your request for a hardship withdrawal is approved, you must provide documentation supporting the expense for which a hardship withdrawal is requested. You must also certify that the amount requested is not more than your immediate financial need.

Please be aware that you cannot withdraw more than the value of the elective salary deferrals you contributed to the plan. For example, if you contributed $5,000.00 in elective salary deferrals, but if your investment options that you have selected produced a negative return of investments, and your account balance has been reduced to $4,000.00, then you are only eligible to withdraw $4,000.00.

You may request an additional amount over the hardship to pay anticipated federal, state or local income taxes or excise taxes due to the distribution. You will be subject to a 10% early withdrawal excise tax if you receive a hardship distribution.

Also, please understand that you will be suspended from making contributions to your Salary Reduction Account (Deferral Contributions) for the 6 months following the hardship distribution.

If you encounter any of these situations and require additional information in order to apply for a Hardship Withdrawal, please contact the Retirement Services Department at the Fund Office.