There are several possible courses of action:
1. Even if your plan does not currently allow for hardship distributions, you could amend the plan document to allow for this. Contact your Client Relationship Manager at TRA to discuss how to amend your plan.
2. If your plan document permits – and a loan would not hurt the participant’s financial situation further – a loan from the plan to the participant is another possibility.
Important Consideration:
The CARES Act allows you to approve loans and/or coronavirus distributions from your plan, even if the plan document does not currently allow them. The CARES Act states that you must update your document to permit the changes you elect no later than the last day of the first plan year beginning on or after January 1, 2022 (governmental plans have until 2024 to amend). The TRA Team is aware of this allowance in the CARES Act and will work with you as needed to amend your plan.
• If your plan allows for in-service withdrawals — and the participant meets in-service distribution criteria — he or she could apply for an in-service distribution.