Stash026 Posted January 17, 2019 Posted January 17, 2019 We have a participant that recently took a loan and is now going out on maternity leave. Is there any special regulations regarding repayments while she is out or if no repayments are made does she default?
C. B. Zeller Posted January 17, 2019 Posted January 17, 2019 Loan payments can be suspended during an unpaid leave of absence of up to 1 year. This does not extend the 5 year maximum loan term. The outstanding balance of the loan should be reamortized into level payments upon the participant's return to work. Lou S. and hr for me 2 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
401_noob Posted January 17, 2019 Posted January 17, 2019 C. B. Zeller is correct. See Treasury Regulation 1.72p-1 Q & A 9.
401_noob Posted January 17, 2019 Posted January 17, 2019 I should add that this assumes that the Plan's loan policy allows loans to be suspended while the participant is on a LOA. hr for me 1
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