Can I withdraw money in case of financial hardship?
If you have an immediate financial need created by severe hardship and you lack other reasonably available resources to meet that need, you may be eligible to receive a hardship withdrawal from your voluntary contributions. A hardship may include:
- Purchase of a principal residence
- College tuition and approved related expenses for you, your spouse or dependents
- Non-reimbursable medical and/or dental expenses for you, your spouse or dependents
- Payment to prevent eviction from or foreclosure on your principal residence
- Payment for burial or funeral expenses for your deceased parent, spouse or children
- Payment for expenses for the repair of your principal residence
If you feel you are facing a financial hardship, you should see your financial professional for more details.
Can I borrow money from my account?
The plan is intended to help you put aside money for your retirement. However, the University of Houston System has included a plan feature that enables you to access money from the plan.
The amount the plan can loan to you is limited by rules under the tax law. All loans will be limited to the lesser of: one-half of your vested account balance or $50,000.
The minimum loan amount is $1,000.
All loans must generally be repaid within five years. A longer term may be available if the loan is to be used to purchase your principal residence.
You pay interest back to your account. The interest rate on your loan will be the Prime Rate plus 1%.
A $50.00 processing fee for all new loans and a $50.00 per year loan maintenance fee are charged to your account.
Unpaid loan amounts will be taxed as ordinary income and may incur a 10% federal tax penalty if the employee is under age 59½.
Other requirements and limits must be met prior to borrowing money from your account. For additional information regarding loans, please see your financial professional. Refer to the Summary Plan Description for more details about this participant loan feature.