Must a participant use all other reasonable available personal assets before a hardship distribution may be made?
Rev. 10/07/04, E-mail Alert 2004-20

It depends. With a prototype plan, hardship distributions are limited by the prototype rules to the four safe harbor reasons. The participant is only required to take all possible distributions from the plan, including a loan, before requesting a hardship distribution. However, individually designed plans or any other plans that use the “facts and circumstances test” for hardship distributions must require participants to first make use of all reasonably available personal assets, whether or not the assets are plan related, before being eligible to receive a hardship distribution.