What if I experience a future financial emergency and need my money?
There are strict provisions for hardship withdrawals. They can be requested from Great-West Retirement Services, but you must prove you are experiencing an unforeseen and extreme financial emergency and provide evidence demonstrating that you have exhausted all other reasonable alternatives. This includes stopping your deferrals and cashing out the maximum allowable annual/personal leave.
An unforeseeable emergency which results in a severe financial hardship can result from any of the following developments:
- An illness or accident of the participant, the participant’s spouse, or the participant’s dependent;
- The loss of the participant’s property due to casualty, including the need to rebuild a home following damage to a home not otherwise covered by homeowner’s insurance (such as a natural disaster); or
- Similar extraordinary and unforeseeable circumstances arising as a result of events beyond the participant’s or beneficiary’s control;
All hardship withdrawals are subject to the applicable requirements of the Internal Revenue Code and regulations.
If my hardship withdrawal is approved, how long will it take to receive my money?
It takes an average of one to two months to obtain all the necessary information for a hardship withdrawal. Payments are usually issued within two weeks from the date the withdrawal is approved by the Plan.
Hardship Withdrawals for an Unforeseeable Emergency (Definition)
- In the event of an unforeseeable emergency which is beyond the control of the Participant and which causes extreme financial hardship, a participant may request Great-West Retirement Services to distribute all or a portion of the Participant's Deferred Compensation account. Such request shall be made by completing and submitting all required forms for this purpose. The Participant must, prior to his application, cease deferring compensation in accordance with Paragraph F of Article III. If the application for the payment is approved by Great-West Retirement Services, payments shall be effective as soon as possible after the date specified in the Participant's application or the date of approval by Great-West Retirement Services, if later.
- Unforeseeable Emergency Defined
- The term "unforeseeable emergency" is defined to be severe financial hardship to the Participant or of a dependent (as defined in IRC Section 152(a)) of the Participant, loss of the Participant's property due to a casualty or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the Participant. The circumstances that will constitute an unforeseeable emergency will depend upon the facts of each case, but, in any case, payment may not be made to the extent that such hardship is or may be relieved.
- through reimbursement or compensation by insurance or otherwise,
- by liquidation of the Participant's assets, to the extent the liquidation of such assets would not itself cause severe financial hardship, or
- by cessation of deferrals under the Plan.
- Examples not considered to be unforeseeable emergencies include the need to send a Participant's child to college or the desire to purchase a home.
- Demonstration of Need
- A Participant requesting a hardship withdrawal by reason of an unforeseeable emergency must clearly demonstrate that the circumstances being experienced were not under the Participant's control and constitute a real emergency which is likely to cause the Participant great financial hardship. Great-West Retirement Services may require such medical, financial, or other evidence deemed appropriate to make a determination concerning the Participant's withdrawal request.
- The withdrawal shall be limited to an amount sufficient only to meet the emergency and shall in no event exceed the value of the Participant's Deferred Compensation account. Any money remaining in the account shall be distributed in accordance with the provisions of this Plan.
- Method of Distribution
- The method of distribution of any allowed withdrawal shall be determined by Great-West Retirement Services.
For more information, contact Great-West Retirement Services at (800) 232-0859.