403(b) Loan eligibility- former employees

[jane123]

403(b) custodian document defines a “participant” as someone who is currently employed by the employer and says that a “participant” may take a loan from the 403(b). Does this exclude former employees from taking a loan from the 403(b)? I know that some 403(b)s allow former employees to take loans .

Thanks in advance for your help.

[mbozek]

Insurance companies permit former employees to take out loans because the annuity is required to offer a loan under state insurance law. The loan is paid directly to the insurer. Custodian accounts are not subject to state insurance laws. If the plan says that only currently employed persons are particpants for loan purposes then loans are not available to former employees.