RecordkeeperDirect® can now support plan sponsors who choose to offer domestic abuse victim distributions, a new distribution type created by the SECURE 2.0 Act of 2022.
If the plan chooses to offer this optional distribution type, participants who are victims of domestic abuse will be able to request a distribution up to the lesser of $10,300, indexed for inflation, or 50% of the participant’s vested account. The distribution must occur within one year of the abuse by a spouse or domestic partner, and the participant has the option to repay the distribution within three years.
This distribution type is not subject to the 10% additional tax on early distributions and is exempt from mandatory 20% withholding.
This distribution type can now be selected on the Retirement Plan Specifications paperwork when initiating a new plan. Existing plans can enable this distribution type by submitting the Plan Maintenance Request form, which is available in the Forms section of the RecordkeeperDirect TPA website. Participants will then be able to request this distribution type through the participant website and mobile app.
If you have any questions about domestic abuse distributions, please call us at (800) 421-6019.