Definition of Deemed Need Plan. The Plan is a “Deemed Need Plan” if hardship withdrawals are made only on account of an immediate and heavy financial need of the Participant where such Participant lacks other available resources. The following are the only financial needs considered immediate and heavy, as described in Treas. Reg. §1.401(k)-1(d)(3)(ii)(B):
(1) expenses incurred or necessary for medical care (that would be deductible under Code §213(d), determined without regard to whether the expenses exceed any applicable income limit) of the Participant, the Participant's spouse, children, or dependents, or a primary beneficiary of the Participant;
(2) costs directly related to the purchase (excluding mortgage payments) of a principal residence for the Participant;
(3) payment of tuition, related educational fees, and room and board for the next 12 months of postsecondary education for the Participant, the Participant's spouse, children or dependents (as defined in Code §152, without regard to subsections (b)(1), (b)(2), and (d)(1)(B) thereof) , or a primary beneficiary of the Participant;
(4) payments necessary to prevent the eviction of the Participant from, or a foreclosure on the mortgage on, the Participant's principal residence;
(5) payments for funeral or burial expenses for the Participant's deceased parent, spouse, child, or dependent (as defined in Code §152, without regard to subsection (d)(1)(B) thereof), or a primary beneficiary of the Participant;
(6) expenses for the repair of damage to the Participant's principal residence that would qualify for a casualty loss deduction under Code §165 (determined without regard to Code §165(h)(5) and whether the loss exceeds any applicable income limit);
(7) Disaster Losses; and
(8) any other financial need determined to be immediate and heavy under rules and regulations issued by the Secretary of the Treasury or his delegate; provided, however, that any such financial need shall constitute an immediate and heavy need under this Section 2.7(8) no sooner than administratively practicable following the date such rule or regulation is issued. For purposes of this Section 2.7, the term “primary beneficiary” means a Beneficiary under the Plan who has an unconditional right to all or a portion of the Participant’s Account upon the death of the Participant.
