WASHINGTON— US Senator Bill Cassidy, MD is requesting a regulatory waiver for those impacted by the flood, allowing them access to their retirement funds early, quickly and without penalty if needed to begin repairing the damage to their homes and property. Similar regulatory waivers were afforded individuals impacted by Hurricanes Katrina and Sandy. This is a basic relief tool that is immediately needed during the recovery from the recent flooding in Louisiana.
“This is a basic relief tool that is immediately needed during the recovery from the recent flooding in Louisiana,” said Dr. Cassidy.
Read the letter here and below:
The Honorable Secretary Lew
U.S. Department of Treasury
1500 Pennsylvania Avenue, NW
Washington, DC 20220
The Honorable Secretary Perez
U.S. Department of Labor
200 Constitution Ave., NW
Washington, DC 20210
The Honorable Commissioner John Koskinen
Internal Revenue Service
1111 Constitution Avenue, NW
Washington, DC 20224
Dear Secretaries Lew, Perez and Commissioner Koskinen:
The unprecedented flooding in Louisiana has impacted over 70,470 individuals causing, to date, over 17,380 flood insurance claims. The Federal Emergency Management Agency (FEMA) estimates that 42 percent of individuals in high-risk flood areas have federal flood insurance coverage while only 12.5 percent of impacted individuals in low to moderate risk zones carried flood insurance policies. Based on these statistics, more than half of the individuals impacted by the recent flooding have inadequate resources to appropriately repair or replace their homes or mitigate against future flood events.
Therefore, I request the Internal Revenue Service (IRS), and the Departments of Treasury and Labor to provide broad-based relief to retirement plan participants affected by this disaster. Specifically, I urge those impacted by this flood disaster attain access to their retirement funds quickly without bureaucratic red-tape hurdles. This includes, but is not limited to, streamlined loan procedures and liberalized hardship distribution waivers for 401(k) plan participants, employees of public schools and tax-exempt organizations with 403(b) tax-sheltered annuities, and state and local government employees with 457 deferred-compensation plans.
The purpose of such hardship waivers or retirement plan loans should encompass repair or replacement of a home or for the installation of mitigation measures to protect against future floods. I also urge that regulatory relief be applied to individuals living outside the declared disaster area who can take out a retirement plan loan or hardship distribution to use to assist a son, daughter, parent, grandparent or other dependent who lived or worked in the disaster area.
Similar regulatory waivers were afforded individuals impacted by Hurricanes Katrina and Sandy. This is a basic relief tool that is immediately needed during the recovery from the recent flooding in Louisiana. I appreciate your attention to this matter and look forward to your prompt action and response.
Bill Cassidy, M.D.
United States Senator