Apply for an Unforeseeable Emergency Withdrawal
When life throws a curveball, Ohio Deferred Compensation is there to help. Ohio Deferred Compensation permits distributions to participants faced with an unforeseeable emergency.
What is an unforeseeable emergency?
Unforeseeable emergencies are narrowly defined by the IRS as:
- A severe financial hardship of the participant or beneficiary caused by an illness or accident involving them, their spouse, or a dependent
- Loss of a participant's property arising from an event due to a casualty, or other similar extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant, that cannot be relieved by reimbursement or compensation by:
- Liquidation of the participant's assets (to the extent the liquidation would not itself cause severe financial hardship), or cessation of deferrals under the Plan. Except as provided in this section, an unforeseeable emergency under IRS Regulations does not include money for college tuition or purchase of a home.
Remember that any assets you have in Ohio Deferred Compensation are tax deferred to encourage saving for retirement, and therefore, the IRS severely limits circumstances in which you can withdraw early.
An unforeseeable emergency doesn’t include:
- College tuition
- Purchase of a home
- Living expenses
- Overextension of credit, such as credit card debt, loans, etc.
Who May Apply?
Any actively employed participant may apply. Since retired or terminated participants, beneficiaries, and alternate payees can start, stop, or change their withdrawals at any time, they don't need to apply for withdrawals through this process.