WAC 131-16-056   Hardship withdrawals.  (1) In the event of a financial hardship consistent with requirements of subsection (2) of this section and Section 403 (b)(11) of the Internal Revenue Code, as amended, a participant may withdraw all or part of the following plan funds:

     (a) Pre-1998 employee contributions;

     (b) Any pre-1989 earnings on employee contributions;

     (c) Any Section 414(h) employer pick-up contributions; and

     (d) Any contributions transferred to this plan from another employer's plan. Such funds may be withdrawn from the participant's state board retirement plan account while actively employed. Hardship withdrawals may not be larger than the amount necessary to meet the immediate and heavy financial need defined in subsection (2) of this section plus taxes on withdrawn funds and early withdrawal penalties. Employer contributions (other than Section 414(h) pick-up contributions) and earnings on the employer contributions may not be withdrawn as a hardship withdrawal.

     (2) To enable hardship withdrawal of funds, the Internal Revenue Code (Section 1.401(k)-1 (d)(2)) requires that the participating employer shall verify that the participant has certified in writing that:

     (a) The participant has an immediate and heavy financial need; and

     (b) The participant has no other resources reasonably available to meet the need.

     Withdrawals shall be deemed to be for "an immediate and heavy financial need" only if they are for:

     (i) Payments to prevent eviction from or foreclosure on the principal residence of the participant;

     (ii) Payments to prevent the participant's impending bankruptcy; and/or

     (iii) Unreimbursable medical expenses incurred by the participant, spouse, dependent children, and/or dependent parents.

     The participant shall be deemed to have "no other resources reasonably available to meet the need" if the participant certifies that he/she cannot meet the need through:

     (A) Reimbursement or compensation by insurance or another source;

     (B) Reasonable liquidation of assets;

     (C) Borrowing from supplemental retirement accounts, life insurance values, or commercial sources; and/or

     (D) Stopping any voluntary employee contributions to tax deferral or savings plans made available by the employer. Contributions to the employer-sponsored retirement plan must continue while the employee remains eligible for the plan.

     (3) Hardship withdrawals from the state board retirement plan are taxable income in the year received. Taxes, early withdrawal penalties, and any other consequences of hardship withdrawals shall be the sole responsibility of the participant. Withdrawals from this qualified plan may not be replaced at a later date.



[Statutory Authority: RCW 28B.10.400. 10-22-073, § 131-16-056, filed 10/29/10, effective 11/29/10; 05-24-051, § 131-16-056, filed 12/1/05, effective 1/1/06. Statutory Authority: RCW 28B.10.400 and chapter 28B.50 RCW. 98-14-033, § 131-16-056, filed 6/23/98, effective 7/24/98. Statutory Authority: Chapter 28B.50 RCW. 95-13-069, § 131-16-056, filed 6/20/95, effective 7/21/95.]