403b loans require stopping monthly contributions?

[Guest Mr. Joe]

I am being told by my district that because I have a loan against my 403b assets that I cannot continue my monthly contributions. No one at the district can point to that in writing, except to say that the district's Third Party Administrator says so. Does anyone know if this is true or not?

[wmyer]

If you took a hardship withdrawal, your contributions to the plan may be suspended for 6 - 12 months. Did you take a hardship withdrawal?

Regarding the loan program, you would have to check your Loan Note or your Summary Plan Description (SPD) to see what the terms of the loan are.

[Guest Mr. Joe]

No Hardship Withdrawal. Just borrowed against the account and am paying it back monthly. Can't find anything written about not being able to continue my monthly contributions. Contrary to what the rep from the TPA is saying.

[QDROphile]

I tend to follow the proposition that anyone who takes an unusual position has the burden of supporting it. The idea that deferrals are affected by a loan is unusual. It is not your job to find the provisions to support it. It is the employer's job to show you why your normal right (to defer and have money delievered to your account) is being compromised. Demand to see the support. If they can show you that the position is correct from the perspective plan terms, report back here to explain. It is unlikely that the position is allowed under 403(b)(12), so you may have to go to round 2.