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Practice Management

Restricting Withdrawals

Q. Since hardship withdrawals are not a protected benefit, is it correct that a 403(b) plan document could change its provisions and allow the withdrawal of employee deferrals only due to hardship? 

A. Yes. The employer in their hardship policy can restrict those distributions only to elective deferrals, or only to pre-tax elective deferrals. That would be up to the employer.