How Do I Apply for A Hardship Withdrawal?

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    The Houston Independent School District 403(b) plan allows for hardship withdrawals in accordance with the IRS 403(b) regulations (Reg. Sec. 1.401(k)-1(d)(3)(i)) and the Pension Protection Act of 2006. All HISD hardship and loan forms and instructions may be accessed from the HISD portal without logging into the site by entering “Updated 403b” in the search field and click on the top link that directs you to the 403(b) Resources page. 
     
    A hardship withdrawal is permitted in order to satisfy one of the following financial needs:
     
    • Medical expenses.
    • Expenses directly related to the purchase of your principal residence, excluding mortgage payments.
    • Tuition and related education fees, room and board, for post-secondary education for the next 12 months.
    • Payments to prevent eviction from, or foreclosure on, your principal residence.
    • Funeral expenses for your deceased parent, spouse, child or dependent.
    • Repairs for uninsured or under-insured damage to your principal home due to theft, storm or other casualty.
     
    For a distribution from a 403(b) plan to be on account of hardship, it must be made on account of an immediate and heavy financial need and may not exceed the amount necessary to satisfy the financial need. The need of the employee includes the need of the employees spouse or dependent. 
     
    A distribution is not considered necessary to satisfy an immediate and heavy financial need of an employee if the employee has other resources available to meet the need, including retirement plan loans. Whether other resources are available is determined based on facts and circumstances. A hardship distribution may not exceed the amount of the employee’s need. However, the amount required to satisfy the financial need may include amounts necessary to pay any taxes
    on penalties that may result from the distribution. 
     
    To apply for a Hardship Withdrawal from your 403(b) plan, please complete the following steps:
     
    STEP 1:
    Contact your 403(b) and 457 vendors to discuss a retirement plan loan. Under new IRS regulations, employees must first obtain 403(b) or 457 loans or other available distributions under the plan before a hardship withdrawal may be permitted. However, an employee may elect to take a hardship withdrawal for the purchase of a principal residence without first taking a 403(b) or 457 plan loan.
     
    STEP 2:
    If a loan is appropriate, you may access the “Updated 403(b) and 457 Investment Plan Resources” page and click on “403(b) Loan Supplement Form”. Print and complete the form. If a loan request is denied by the vendor, employees must obtain a loan decline letter from the vendor and include with the completed hardship withdrawal forms.
     
    STEP 3:
    Contact your 403(b) or 457 plan vendor to discuss IRS rules on hardship withdrawals. If a loan is not available and the hardship withdrawal is appropriate, request a loan decline letter and hardship withdrawal forms from your 403(b) vendor.
     
    STEP 4:
    Obtain a Hardship Withdrawal Eligibility certificate from Retirement Manager.
    Retirement Manager uses eligibility certificates to pre-qualify you for a Hardship Withdrawal from your retirement plan. To begin requesting a certificate, select “Request a Withdrawal” from the left menu on the home page. 
    A. Select a plan:
    To request a withdrawal, first select your retirement plan. Make your selection from the plans that are eligible for a distribution.
     
    B. Select withdrawal type:
    The types of withdrawals available to you will depend on the retirement plan you selected, your current employment status, and the types of withdrawals offered by your employer. If you are unsure what type of withdrawal you need, please contact your employer or financial adviser. Select “Hardship Withdrawal” as the distribution type from the drop-down menu that is on the right side of the screen.

    NOTE:

    An informative window will appear informing you of certain conditions you must first meet prior to requesting a Hardship Withdrawal. Click “Close” to proceed.
     
    C. Review and/or add prior withdrawal transactions:
    Retirement Manager will display any previous withdrawal transactions that will be used to pre-qualify your withdrawal. If there are any transactions missing, you should add them by following the screen prompts at the bottom of the page. If there are no new transactions that must be reported, click the “Next” button to proceed.
     
    D. Complete your withdrawal request:
    Input the amount for your requested Hardship Withdrawal. If you do not see your investment provider listed, you may manually add your provider following the prompts on the screen. Once you have input your amount for your provider(s), be sure to complete the additional questions that are specific to the Hardship Withdrawal you are requesting. Click on “Submit” to proceed.

    E. Confirmation/Print Certificate(s):
    If your request for a Hardship Withdrawal was successful, the confirmation page will contain a link to print your certificate(s). If your request was not approved, a message will display, contact your employer with any questions.
     
    STEP 5:
    Submit the forms, necessary supporting documentation, and the Hardship Withdrawal Eligibility certificate to your provider.
     
    If you need assistance, please contact the Retirement Manager Support Line at 1-866-294-7950. The support line is available Monday – Friday, 7:00 am to 6:00 pm CST (excluding holidays).