403B loan default

[Guest TAG]

A participant has an existing loan in a University 403B plan and voluntarily terminates employment. Contract between University and TPA states that loan payments may be made upon separation. TPA automatically defaults loan even though participant requests that loan payments be continued. TPA sends back remaining loan payment received through payroll deduction to participant which is received after TPA defaults loan.

Question is:

1) Is TPA required to allow participant to continue loan payments. If so, by law, by contract or both. If by law, any references to section.

2)Recommended recourse (DOL, etc.) if any.

Thanks for your time

TCAT

[Guest Brent Rowell]

Is there anything about termination in the loan document?

What is the TPA's explanation?

I would think the employee would look to ex-employer for relief.