for "Participant receives a hardship w/d in cash in 2001 (before pension reformis effective) that includes a payment from his after tax account,his 401(k) account and company matching cont. account. Basis (after tax cnt.) included in the distribution is less than the amount distributed from his after tax acount. The participant wants to rollover the entire eligible amount of the distribution to an IRA. Can the prticipant do this??????/"

First check the plan document to see if it has an ordering provision that will determine the character of the amount distributed. For example, some plans state that after tax accounts must be withdrawn first before the participant can get to other money.

Next, ask youself how it is a hardship if the participant is going to roll money over instead of spend it on the financial obligation that justifies the withdrawal.

Hardship Distributions of deferral contributions are not rollover eligible (effective 1999- transition year 1999). However, hardship distributions of employer contributions are rollover eligible

The entire eligible rollover amount can be rolled to an IRA - this is the amount less after tax contributions and hardship attributable to elective deferrals.