U.S. Sen. Bill Cassidy (R-LA) called for a regulatory waiver on Friday that would enable those impacted by the flooding in Louisiana to access retirement funds without penalty to repair property damage.
In a letter to Treasury Secretary Jack Lew, Cassidy noted that similar regulatory waivers were extended to those impacted by Hurricane Sandy and Hurricane Katrina.
“The unprecedented flooding in Louisiana has impacted over 70,470 individuals causing, to date, over 17,380 flood insurance claims,” Cassidy wrote. “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.”
Cassidy requested that the IRS, the Treasury Department and the Labor Department provide “broad-based relief to retirement plan participants” who have been impacted by recent floods in Louisiana.
“Specifically, I urge those impacted by this flood disaster attain access to their retirement funds quickly without bureaucratic red-tape hurdles,” Cassidy said. “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.”
Hardship waivers or retirement plan loans should be available to cover repair or replacement costs of homes, Cassidy wrote, or to install mitigation efforts to protect against future floods.