A DoL press release says it will not treat any person as having violated the provisions of Title I of the Employee Retirement Income Security Act (ERISA) because they complied with the provisions of IRS Announcement 2005-70.
The guidance expands the circumstances under which hardship and loan distributions can be made from a plan to participants and beneficiaries affected by the hurricane. It also eliminates the need for obtaining otherwise required documentation in advance of a hardship or participant loan distribution.
Earlier this week, Senators introduced a tax relief bill that included waiving the 10% early withdrawal penalty for Hurricane Katrina victims (See Senators Present Katrina Tax Relief Package ).
The DoL and IRS say they will continue to monitor the Katrina situation and will issue futher guidance as necessary. Questions should be directed to the DoL at 1-866-4USA-DOL, the EBSA at 1-866-444-3272, or the IRS at1-877-829-5900.
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