It seems that the new legislation may have removed the reduction in contribution limit in the year following the year of the withdrawal. Much of the background discussion seems to lend itself to the 6 month suspension as an adequate remedy. Does anyone have a thought on this matter? Do you feel the reduction in contributions has been repealed? If not, is the reduction based on pre and post hardship participation within the same limitation year, i.e., participate until 3/1, suspend until 9/1 having taken the hardship 3/1, and participate again until the end of the year.... your thoughts or places this is addressed would be appreciated.

Nothing actually changed under EGTRRA. EGTRRA ordered the IRS to revise their regulation to change the 12 months to six months (this provision is not in the law, only in an IRS regulation).

Until the IRS actually changes the regulation (they are like an obstinate child when it comes to the Congress telling them to do something - it won't happen soon), your questions are unanswerable.

The IRS has not indicated what the correct answer is yet. I am sure that everyone will interpret this whatever way makes sense to them until it happens.

While logically, one would think that the regulatory rule applying one year's worth of 402(g) limit to two years' of deferrals in the case of a hardship withdrawal using the safe harbor resources test would change or be eliminated because the 12-month suspension is becoming only a 6-month suspension, the safest course for now is to continue to enforce the one year's worth of 402(g) limit until the IRS tells us otherwise.