Loan Repayments While On Suspension

[metsfan026]

Question regarding a participant being out on suspension from their job in terms of their loan repayments.

The plan states that repayments have to be made through payroll deduction, so obviously if they are out on suspension no repayments will be made.  There are two options that I see:

1) Re-amortize the loan to increase the weekly repayments
2) Have the employee makeup the missed payments and leave the schedule the same

Is #1 a viable option, or would that not be allowed?  I know we can do it if someone is on a leave of absence, but can we do it for a suspension?

Thanks!

[Lou S.]

What does your loan program say?

You can suspend for up to 12 months for approved leave of absence if loan program allows. You can take payments outside of payroll if loan program allows. You can reamortize when they return, see §72(p) for acceptable reamortization methods.  You can take a payment for the missed payment when they return. Note the loan continues to accrue interest in while thy are on leave and payments are suspended.

I've done #1 in the past of several plans when the participant returns from leave.

[metsfan026]

On 3/12/2024 at 1:31 PM, Lou S. said:

What does your loan program say?

You can suspend for up to 12 months for approved leave of absence if loan program allows. You can take payments outside of payroll if loan program allows. You can reamortize when they return, see §72(p) for acceptable reamortization methods.  You can take a payment for the missed payment when they return. Note the loan continues to accrue interest in while thy are on leave and payments are suspended.

I've done #1 in the past of several plans when the participant returns from leave.

We re-amortize when someone is on an approved leave of absence.  I wasn't sure if a suspension qualified as a leave, or if that had to be handled differently