Hardship Distributions from the USC Retirement Plans
- Tax deductible medical expense for immediate family that is not paid by insurance (Documentation: Explanation of Benefits and bill from provider.)
- Purchase of principal residence (Documentation: signed purchase agreement.)
- Tuition incurred during the next 12 months for post-secondary education for immediate family (Documentation: fee bill showing applied scholarships, financial aid and other payments.)
- To prevent eviction or foreclosure on principal residence (Documentation: bank notice or court ordered eviction papers.)
- To pay for burial or funeral expenses for immediate family member (Documentation: invoice from funeral home and death certificate.)
- Expenses for the repair of damage to principal residence that would qualify for a casualty deduction (Documentation: insurance statement and invoice from service provider.)
Under the provisions of the USC Retirement Savings Program and the USC Hospital 401(k) Retirement Plan, a participant who is employed by USC may apply for a hardship distribution from his/her retirement plan because of one of the following documented immediate and heavy financial needs:
- by other distributions or loans from any retirement plan; the participant must have already exhausted all loan opportunities through the USC Plans,
- through reimbursement or compensation by insurance or otherwise,
- by reasonable liquidation of assets or those of the spouse or minor children, to the extent such liquidation would not itself cause an immediate and heavy financial need,
- borrowing from commercial source (e.g., a bank or credit union) on reasonable commercial terms
The participant must provide specific and detailed documentation and certify that the need cannot be met:
The amount available for a hardship distribution is limited to employee contributions only, not earnings, and cannot exceed the amount needed to pay the documented expenses plus mandated withholding and penalties, if applicable. The distribution will be taxed as ordinary taxable income and an additional 10% IRS penalty will apply if the participant is under age 59. Notarized spousal consent is required for distributions from the USC Retirement Savings Program.
Effective August 1, 2012, participants who take a distribution from their retirement plan due to a financial hardship will have their contributions to all USC retirement plans suspended for a six month period. It will be the participant's responsibility to re-instate their contributions following the end of the six month period.
If you need additional information or want to clarify the documentation that is required to approve your request, please contact Benefits Administration (email@example.com) for 403(b) plans or Retirement Plan Administration (firstname.lastname@example.org) for the Hospital 401(k) plan.