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A further commentator objected to the whole elimination with the lookback rule beneath the proposed rules. The commentator cited three factors for its opposition: first, that an amount dispersed in the hardship or other form of distribution remains part of a participant's profit; 2nd, that a participant could manipulate a distribution as a way to evade the spousal-consent specifications; and, 3rd, that allowing cash-outs after a hardship or other distribution is Opposite on the policy of discouraging non-retirement distributions.
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The provision within the proposed regulations prohibits a cashout following the annuity beginning day of a gain “becoming dispersed in any sort.” The rule will not utilize to any advantage that's not but “remaining distributed”—that may be, to any advantage with regard to which no payment continues to be made.
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