Repayment of Loan Upon Termination

[Guest MicheleCaldwell]

The plan document provides that loans are payable upon termination of employment. However, neither the document or loan policy defines the time for repayment. What is a reasonable time frame for allowing a participant to repay the loan in full upon termination of employment. I don't think the cure period applies to termination.

Is it reasonable to give the participant until the next payroll when their payroll withholding would have occurred?

[FundeK]

I believe the ERISA Outline book says that 30 days is reasonable. Even though the cure period doesn't apply, we typically allow about that much time for repayment. I would reccommend having an internal policy (perferrably in writing) and applying it consistently.

[Guest hyper]

You should also check the Promissory Note to confirm there is no time frame for default after termination.

I am curious, if you have no guidance regarding when the loan is to be defaulted, why do you think the cure period permitted for other loans does not apply ?