Revenue Ruling 2010-27 contains examples of certain expenses that may be eligible for an unforeseeable emergency distribution from a 457(b) deferred compensation plan. In general, a 457(b) plan may permit hardship distributions for unforeseeable emergencies if specific requirements are met. This new ruling determines that residential flood damage and funeral expenses of a non-dependent child may be unforeseeable emergencies arising from events beyond the control of the participant. However, accumulated credit card debt would not be eligible for an unforeseeable emergency distribution. Plan provisions governing unforeseeable emergency distributions 457(b) plans may offer distributions to a participant based on an unforeseeable emergency for: an illness or accident of the participant, the participant’s beneficiary, or the participant’s or beneficiary’s spouse or dependents; property loss caused by casualty (for example, damage from a natural disaster not covered by homeowner’s insurance) of the participant or beneficiary; funeral expenses of the participant’s spouse or dependent; and other similar extraordinary and unforeseeable circumstances resulting from events beyond the control of the participant or his or her beneficiary (for example, imminent foreclosure or eviction from a primary residence, or to pay for medical expenses or prescription drug medication). The participant seeking the distribution must show that the emergency expenses could not otherwise be covered by insurance, liquidation of the participant’s assets or cessation of deferrals under the plan. Examples of requests for emergency distributions The ruling lists three examples of participant requests for emergency distributions: repair significant water damage to the participant’s principal residence not covered by insurance - the distribution is allowable because the damage to the participant’s primary residence is an extraordinary and unforeseeable circumstance and is substantially similar to the need to pay for damage to a home from a natural disaster. pay funeral expenses of the participant’s non-dependent adult son - the distribution is allowable because it is for an extraordinary and unforeseeable circumstance and is substantially similar to the need to pay for funeral expenses of a dependent. pay credit card debt - the distribution is not allowable because it is not due to an extraordinary and unforeseeable circumstance or the result of events beyond the participant’s control. In addition to 457(b) plans, the examples and related rules cited in the ruling also apply to emergency distributions from a nonqualified deferred compensation plan subject to IRC Section 409A.