Hardship Withdrawal and Loan Information from Employee Contributions to Defined Contribution Plan
The following administrative elections record Washington and Lee University's ("the University") rules regarding loans from its Defined Contribution Plan, effective April 1, 2011. These elections/rules are intended to supplement, but not supersede, the provisions of Section 7.06 of the Basic Plan Document entitled, "Plan Loans" and/or the separate "Plan Participant Loan Program" document.
- Participants may have only one outstanding loan at a time.
- The minimum loan amount is $1,000. The maximum loan amount is $50,000. The amount you are eligible to borrow is determined by your account balance. Loans can be taken for any reason.
- If borrowing from an account with TIAA, 110% of the loan must be must be kept as collateral in the TIAA Traditional Annuity. A Participant's TIAA Traditional Annuity is not decreased by the amount of a loan unless the loan goes into default.
- Variable rate loans for a maximum term of 5 years. The interest rate shall be a reasonable rate, to be set at the time the loan is made. The reasonable rate of interest shall be established by the Plan Administrator or the applicable investment company, based on the index used by that investment company. The interest rate shall be adjusted from time to time as provided under the terms of the applicable funding vehicle. The term of a loan to be used to acquire a Participant's principal residence may extend to 10 years. The collateral will be 50% of the Participant's vested interest in the Plan.
- A Participant must obtain the consent of his/her spouse, if any, as required by Section 7.06 of the Basic Plan Document and/or the "Plan Participant Loan Program."
- Repayment must be made within five years (ten years if the loan is used to acquire a Participant's principal residence) unless loan repayments are suspended under the provisions of Section 7.06 of the Basic Plan Document and/or the "Plan Participant Loan Program."
- Former employees cannot obtain a loan. They have the right to take a distribution once they have severed employment with the University.
- Any Participant who defaults on a loan is no longer eligible to request a loan.
- The individuals at the University who are authorized to approve loans are Mary Main, Kimberly Austin, and Deborah Stoner.
- TIAA and Fidelity are authorized to administer loans as approved by the University. Participants can obtain more information on loan procedures by contacting the TIAA National Call Center at 1-800-842-2776 or Fidelity at 1-800-343-0860
Hardship Withdrawal Availability
You must provide a completed Washington and Lee University Defined Contribution Plan Employee Certificate and the following applicable supporting documents when you request a hardship withdrawal. If married, you must provide your spouse’s written consent to this distribution.
If your request is based on:
Medical expenses for you, your primary beneficiary under this plan, your spouse, or your dependent, you must provide a medical or hospital bill (if after services have been rendered) or a letter from a doctor and/or hospital indicating the proposed cost (if prior to services being rendered). ALSO, if the medical expense is your primary beneficiary’s, spouse’s or dependent’s expense and the University has no record of that person in our files, you must provide an official document (such as a marriage certificate or tax return) evidencing the beneficiary status, marriage or dependency of the child.
Purchase (excluding mortgage payments) of your personal residence, you must provide a copy of the purchase contract signed by the seller or you and the seller and a good faith estimate of the settlement costs.
Payment of college tuition and/or related educational expenses and room and board (not including books) for next year for you, your primary beneficiary under this plan, your spouse, child, or other dependent, you must provide a bill for tuition and/or the related educational expenses and room and board, or a letter from a college official stating what will be owed for these items exclusive of financial aid for the next year or part thereof. ALSO, if the tuition or related educational expenses are your primary beneficiary’s spouse’s or your dependent’s and the University has no record of that person in our files, you must provide an official document (such as a marriage certificate or tax return) evidencing the beneficiary status, marriage or dependency.
Payments to avoid eviction from or a mortgage foreclosure on your principal residence, you must provide a letter or court papers threatening eviction or foreclosure, declaring a default in rent or mortgage payment, or other document indicating a payment is in arrears.
Payment for burial expenses of your parent, primary beneficiary under this plan, spouse, child, or other dependent, you must provide a death certificate and invoice for burial expenses.
Payment of expenses to repair damage to your principal residence, due to a casualty loss, if you are located in a federally declared disaster area, and you must provide an official insurance estimate or claim.
Hardship Withdrawal Rules
The following administrative elections record Washington and Lee University's ("the University") elections/rules regarding hardship distributions from its Defined Contribution Plan, effective January 1, 2019.
a. Hardship distributions are permitted to the extent allowed by the Adoption Agreement and the Individual Agreement.
b. All hardship distributions must comply with Treasury Regulation Section 1.401(k)-1(d)(3), conforming to the safe harbor need/purpose and safe harbor necessity/amount rules, as provided for in Section 6.07 of the Basic Plan Document.
c. Hardship requests are not limited to one per year unless the applicable funding vehicle (Individual Agreement) imposes such a limitation.
d. Contracts cannot be surrendered for financial hardship. Only employee contributions may be withdrawn.
e. All hardship distributions are reported on Form 1099R to the Internal Revenue Service.
f. Participants making a hardship request must retain documentation to support the claim of a financial hardship and provide such documentation as required by the University in reviewing the hardship request.
g. The University and TIAA or Fidelity will exchange information to the extent necessary to implement hardship provisions.
h. The conditions for hardship distributions are listed above.
i. Hardship requests require the advance authorization of the University using the form above.