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Need money from your 403(b) or 457(b) retirement plan? What you need to know.

Do you qualify for a hardship?

Your employer’s plan and the IRS define definite circumstances that may qualify you for a hardship distribution from your 403(b) retirement plan. To qualify, you must exhaust all other financial sources, including loans. Evidence of the hardship must be provided with your paperwork, to document both the nature and amount of the hardship. Documentation needs to be current, unpaid, dated, and descriptive.

Eligible hardship reasons include:

  • Secondary education for you, your spouse, or dependent
  • Purchase of primary residence
  • Prevent eviction or foreclosure
  • Health expenses
  • Funeral expenses
  • Damage to your principal residence

All documentation must be submitted to your third party administrator (NBS) for review and processing. When approved, the request will then be sent to your investment provider and your funds will be distributed. If you receive a hardship distribution, you will not be able to make any deferral contributions to your 403(b) plan for 6 months. After six months, you must submit a new salary reduction agreement to NBS to defer salary to your account.

What is the difference between a 403(b) hardship and a 457(b) unforeseeable emergency?

Unforeseeable emergency withdrawals are specific to 457(b) retirement plans. They are only allowed if proper documentation validates and complies with the requirements of the Internal Revenue Code. As a general guideline, unforeseeable emergency money cannot be dispersed for an event within your control. An event within your control includes, but is not limited to, a down payment for a home, mortgage payments, credit card bills, normal monthly bills including utility bills, rent, cell phone bills, debt, tuition expenses, loan payments, etc. These are not considered unforeseeable emergencies. If your unforeseeable emergency meets the requirements, submit all paperwork to NBS for review and processing. Appropriate documentation is required, including providing evidence of the nature and amount of the unforeseeable emergency. Unlike a 403(b) hardship, there is no contribution suspension period for the 457(b) unforeseeable emergencies. This means you can still contribute to your 457(b) retirement plan after you take your unforeseeable emergency without a suspension period affecting your contributions.

Some examples of an unforeseeable emergency would be:

  • Loss of the participant’s or beneficiary’s property because of casualty or other extraordinary and unforeseeable circumstances arising as a result of events beyond the control of the participant or beneficiary.
  • Severe financial hardship to the participant resulting from a sudden and unexpected illness or accident of the participant or beneficiary, the participant or beneficiary spouse, or the participant or beneficiary’s dependent.

If you have any questions, please call us at 1 (800) 274-0503 option 5. These forms can also be found on our website at