The provision is part of a package of new 401(k) rules that employers are supposed to implement on Jan. 1, 2006. But given the dire need of Katrina victims, those behind the lobbying effort are hopeful the government will allow companies to put the hardship provision into effect early.
To qualify, a homeowner must show an "immediate and heavy need" for the money, must already have borrowed 50% of the 401(k) balance, and must have exhausted other funding options. Such distributions incur a 10% early withdrawal penalty for people younger than 59 1/2 and regular income tax.
But Brian Graff, executive director of the American Society of Pension Professionals & Actuaries, says his organization and others are proposing that Congress also waive the 10% early withdrawal penalty and allow the tax bite to spread over a number of years, instead of just one. Do you enjoy chipmunking? If you don't know what that means, you can pull out your BlackBerry to look it up on the Internet or get Green Weenies and Due Diligence by entrepreneur Ron Sturgeon (Mike French Publishing, $28.95). While many books define business words, this tome is definitely a Binaca blast (a breath of fresh air).Green Weenies is a compilation of more than 1,200 business terms in two parts. The first is fun but useful. Ever been involved in an enterprise that's "circling the drain?" (It's failing.) Or heard a project referred to as "mouse milking?" (It's a venture with maximum effort for minimum returns.) The more sober half deals with standard business-and-investment jargon, from dilution to run rate and synergy. The entire book is enlivened by the comically grotesque illustrations of cartoonist Gahan Wilson.
At the greenweenies.com Web site, you can contribute your own "fortune cookie" that could be posted online or included in Sturgeon's next edition. Fortune cookie? It's "a witty way to refer to something you heard that is insightful."