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QOTW: Distributions for Natural Disasters

Sponsored by MFS Investment Management

Last week we asked plan sponsors how likely they were to add the optional SECURE 2.0 provision allowing penalty-free distributions for natural disasters. Not surprisingly, the answer is largely dependent on location. Though nearly forty percent of plans “definitely will” or “likely will” add this provision, an equal amount of respondents are unsure. For many plan sponsors, this provision is not at the top of their list to consider as they have mandatory provisions to enact. For the quarter of respondents unlikely to add this provision, many are in areas not likely to be affected by natural disasters. See comments below.


  • Our Plan is voluntary and supplemental, we will add.
  • Our location does not get natural disasters
  • We don't allow any type of hardship distribution.
  • I think this is a reasonable need for penalty-free distributions
  • Our business is located in an area prone to hurricanes and tornados so we would consider adding this feature to our plan.
  • Plan participants should be able to access their balances for life emergencies, including natural disasters.
  • We'll need more details around this but would definitely like to offer the option if it's administratively feasible.
  • I doubt it. We do not have locations in areas that historically see natural disasters
  • Isn't that what FEMA is for?
  • This is climate based, as I do not anticipate California Employers taking this as an option since weather is not as harsh.
  • We already review each on a case-by-case basis, to ensure we're capturing the needs of associates in those affected areas.
  • I feel that is something our advisor and board need to explore in further detail.  Especially operating in TX & FL (states that experience plenty of natural disasters)
  • I think this is likely something we will look into but unsure if we would implement.
  • I'm not yet clear what the advantage is to add this as a separate withdrawal vs incorporating into hardship provisions.  This isn't coming to the top of the SECURE 2.0 things to evaluate with urgency.
  • If other plan changes are made, this will most likely be added as well.
  • Many of the optional items are under consideration but waiting for how these options are going to be handled.
  • Our area is not subject to many natural disasters such as hurricane or tornado.
  • We will need to evaluate impacts on implementation, recordkeeping and Participant education
  • We would need more information on what qualifies for such a distribution.