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403(b) Loans - a.s.a.p. please


Guest STLGiant

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Guest STLGiant

I understand the penalties for defaulting on an ERISA 403(B) loan. What is the penalty for non-ERISA 403(B) arrangements for PUBLIC vs. non-PUBLIC schools?

Addl query: Will the participant's ENTIRE annuity be deemed defaulted if a loan default is experienced.

Any sites would be greatly appreciated. Thanks in advance...

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A 403(B) annuity is not a qualified plan- it is an employer contribution to an annuity owned by the employee. If the employee defaults on the loan, the outstanding balance is included in taxable income in year of default. The annuity is not disqualified. There is no consequence to other employees' 403(B) annuity contracts because of a loan default by one participant.

mjb

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Guest STLGiant

Thanks MJB, that's what I thought. By the way, do you want to take a crack at my 401(k) Message Board post ?. Thanks in advance...

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