Hardship Provisions

Hardship provisions for early withdrawal of funds from 403(b) and 457 plans have a defined set of qualifying criteria, including:

  • purchase of primary residence
  • prevention of foreclosure and / or eviction
  • repairs to home due to natural disaster
  • post-secondary education expenses
  • funeral expenses
  • medical expenses not covered by insurance

Before taking a hardship distribution, however, you must first take a loan against assets in the plan.

Unforeseeable emergency provisions

Unforeseeable emergency provisions include:

  • medical expenses not covered by insurance
  • funeral expenses
  • repairs due to natural disaster
  • property loss due to accident or casualty
  • repair of primary vehicle due to accident
  • vehicle repossession
  • utility disconnection
  • AC unit repair
  • legal fees
  • moving expenses due to eviction, foreclosure, or divorce
  • involuntary loss of income
  • “similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant”
  • The State of Arizona’s 457 Deferred Compensation plan never has any penalties for distributions (withdrawals or unforeseeable emergency distributions)