Or. Admin. Code § 459-050-0150 - Unforeseeable Emergency Withdrawal
The purpose of this rule is to establish the criteria and process for a participant to obtain a distribution of deferred compensation funds before separation from employment due to an unforeseeable emergency.
(1) Definitions. For
purposes of this rule:
(a) "Deferred
Compensation Account" means the account described in OAR
459-050-0001, but does not
include any amount in the Self-Directed Brokerage Option.
(b) "Designated Roth Account" means the
account described in OAR
459-050-0001, but does not
include any amount in the Self-Directed Brokerage Option.
(c) "Emergency withdrawal" means a payment to
the participant from the participant's Deferred Compensation Account,
Designated Roth Account, or a combination of both, in an amount directly
related to and reasonably necessary to satisfy a financial obligation
attributable to an unforeseeable emergency.
(d) "Unforeseeable emergency" or "Unforeseen
emergency" means a severe financial hardship to a participant resulting from a
sudden and unexpected illness or accident of the participant or of a dependent
of the participant as defined in
26 CFR
1.152-1, a loss of the participant's property
due to casualty or other similar extraordinary and unforeseeable circumstance
beyond the control of the participant.
(2) Eligibility for emergency withdrawals.
Only a participant who established a deferred compensation account as an
eligible employee and has not terminated from employment with their plan
sponsor may apply to receive an unforeseeable emergency withdrawal. An
alternate payee of a participant may not be eligible to receive an emergency
withdrawal.
(3) A participant must,
if eligible, apply for a loan under the provisions of OAR
459-050-0077 before application
for an unforeseen emergency withdrawal unless, as determined by the Deferred
Compensation Manager, the participant would suffer additional financial
hardship by complying with the loan application requirement.
(4) Source of emergency withdrawals. The
amount of an emergency withdrawal will be deducted first from the participant's
Deferred Compensation Account unless otherwise indicated by the participant on
the emergency withdrawal application.
(5) Circumstances that do not constitute an
unforeseeable emergency. An emergency withdrawal may not be approved for any
reason other than an unforeseeable emergency. Circumstances that do not
constitute an unforeseeable emergency include, but are not limited to:
(a) Participant or dependent school
expenses;
(b) The purchase of a
home or costs associated with a voluntary relocation of housing;
(c) The reduction of personal credit
liabilities not associated with an unforeseeable emergency;
(d) Expenses associated with a legal
separation or the dissolution of a marriage;
(e) Expenses associated with medical
procedures that are elective or not medically required;
(f) Expenses associated with establishing or
managing a personal business;
(g)
Recreational expenses;
(h) Travel
expenses not associated with an unforeseeable emergency; and
(i) Usual and customary tax
obligations.
(6)
Limitations on amount of emergency withdrawal. The amount of an emergency
withdrawal may not exceed the combined balance of the participant's Deferred
Compensation Account and Designated Roth Account. The maximum amount that may
be approved as an emergency withdrawal shall be limited to what is reasonably
needed to satisfy the immediate financial obligation related to the
unforeseeable emergency, including taxes anticipated on the distribution. The
amount of the emergency withdrawal shall be limited to the extent that the
financial obligation can or may be satisfied by:
(a) Reimbursement or compensation by
insurance or otherwise;
(b)
Liquidation of the participant's assets, to the extent the liquidation of such
assets would not itself cause severe unforeseeable emergency; or
(c) Cessation of participant contributions to
the Deferred Compensation Program.
(7) Application for an emergency withdrawal.
A participant must submit a completed emergency withdrawal application and
financial information and related documentation sufficient to satisfy the
provisions of this rule. The emergency withdrawal application may be returned
if incomplete or if insufficient financial information or related documentation
is submitted.
(a) The application may be
obtained from the Deferred Compensation Program or the third party
administrator (TPA) retained to administer a portion of the Deferred
Compensation Program.
(b) The
completed application, financial information, and related documentation shall
be submitted by using online account access or other methods approved by the
Deferred Compensation Program.
(8) Cancellation of future contributions.
Contributions by a participant to the Deferred Compensation Program shall
immediately be cancelled upon receipt of an application for an emergency
withdrawal from the participant. A participant who receives a denial for an
emergency withdrawal may enroll to make elective deferrals and contributions to
the Deferred Compensation Program at any time.
(9) Approval or denial notification. The
Deferred Compensation Manager or an authorized designee shall approve or deny a
request for an emergency withdrawal within three working days after receipt of
an accepted application. The participant will be notified by mail within 10
days after a decision is made.
(10)
Release of payment upon approval of an emergency withdrawal. The Deferred
Compensation Manager or an authorized designee shall determine the method of
payment. The Deferred Compensation Program shall immediately notify the TPA to
release the requested funds.
(11) A
participant may appeal a denial of an emergency withdrawal to the Unforeseeable
Emergency Withdrawal Appeals Committee as provided in OAR
459-050-0040. The appeal shall
be in writing and must include:
(a) A request
for review by the Unforeseeable Emergency Withdrawal Appeals
Committee;
(b) A short statement of
the facts that are the basis of the appeal; and
(c) Any additional information or
documentation to support the request for an emergency withdrawal.
(12) Number of emergency
withdrawal requests. The number of times a participant may apply for an
emergency withdrawal is unlimited and is unaffected by previous
applications.
Notes
Statutory/Other Authority: ORS 243.470
Statutes/Other Implemented: ORS 243.401-243.507
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