Loans to Participants. (a) An Active Participant receiving a regular paycheck from the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator or its designees in their sole discretion. In no event shall the amount of the loan be less than $1,000, and the amount of the loan, when added to the aggregate amount of all Plan loans to the Participant then outstanding, may not exceed the lesser of: (i) $50,000, reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan during the one-year period ending on the day before the date on which such loan was made, over (B) the outstanding balance of loans from the Plan on the date on which such loan was made; or (ii) one-half of the Participant's vested Account Value on the date of the loan. (b) Loans made to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than five (5) years. Loans made to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off. (c) Any loan to a Participant hereunder shall be considered an investment of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect at the time the Plan Administrator
Appears in 1 contract
Loans to Participants. A Worker Member, or a Participant who is a party‑in‑interest (as defined in ERISA Section 3(14)) with respect to the Plan (a “Loan Applicant”), may request a loan from the Trust Fund in accordance with the terms of a written loan policy which is hereby incorporated as part of the Plan. The loan policy shall include loan application guidelines, subject to the following:
(a) An Active Participant receiving a regular paycheck from Except as provided in the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance payfollowing sentence, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans no loan shall be approved by made to a Loan Applicant if, after such loan, the Plan Administrator or its designees in their sole discretion. In no event shall the amount sum of the loan be less than $1,000, outstanding balances (including principal and the amount of the loan, when added to the aggregate amount interest) of all loans made to him under this Plan loans to the Participant then outstanding, may not and all other Related Plan would exceed the lesser of:
of $50,000 (iadjusted as provided below) or one half of the amount which is vested in accordance with Section 14.1. The foregoing $50,00050,000 limitation shall be adjusted by subtracting therefrom the amount, reduced by the excess (if any) of (A) , by which the highest outstanding loan balance of loans from the Plan Loan Applicant at any time during the one-year period ending on the day before preceding the date on which of such loan was made, over (B) the exceeds such outstanding balance of loans from the Plan on the date on which such loan was made; or
(ii) one-half of the Participant's vested Account Value on the date of the loan.
(b) Loans Each loan to a Loan Applicant shall be made to Participants for purposes other than for the purchase of from the Participant's principal residence ’s entire vested Account held in the Member Investment Component, the Profit Sharing Component and Company Stock Component. Such loan shall be for terms charged against each Investment Fund and the Participant’s Company Stock Component Account (if any) on a pro-rata basis.
(c) Each loan shall be evidenced by a written note providing for:
(i) a reasonable repayment period of not less than one (1) nor year and not more than five (5) years. Loans made to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off.
(c) Any loan to a Participant hereunder shall be considered an investment of the Participant's Account, and loan funds will be drawn 5 years from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%(10 years if such loan is used to acquire any dwelling unit which within a reasonable time is to be used as the principal residence of the Loan Applicant);
(ii) a reasonable rate of interest; and
(iii) such other terms and conditions as the Administrative Committee shall determine.
(d) Payments of principal and interest to the Trustee with respect to any loan or portion thereof shall be credited to each Investment Fund in accordance with the Loan Applicant’s investment direction for future contributions. The interest rate in effect for the entire term Any portion or all of the loan will may be prepaid at any time without penalty.
(e) At the rate in effect Administrative Committee’s discretion, if the outstanding balance of principal and interest on any loan is not paid at the time expiration of its term, such outstanding balance shall be treated as distributed under the Plan Administratorbut only to the extent such balance (or portion thereof) is then distributable under the terms of the Plan.
(f) Each outstanding promissory note of a Loan Applicant shall be canceled and the unpaid balance of the loan, together with any accrued interest thereon, shall be treated as a distribution to or on behalf of the Loan Applicant within 90 days after the date of his termination of employment.
(g) A Loan Applicant may not have more than three loans outstanding at any one time.
Appears in 1 contract
Loans to Participants. (a) An Active Participant receiving a regular paycheck from the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator or its designees in their sole discretion. In no event shall the amount of the loan be less than $1,000, and the amount of the loan, when added to the aggregate amount of all Plan loans to the Participant then outstanding, may not exceed the lesser of:
(i) $50,000, reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan during the one-year period ending on the day before the date on which such loan was made, over (B) the outstanding balance of loans from the Plan on the date on which such loan was made; or
(ii) one-half of the Participant's vested Account Value on the date of the loan.
(b) Loans made to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than five (5) years. Loans made to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off.
(c) Any loan to a Participant hereunder shall be considered an investment of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect at the time the Plan AdministratorAdministrator receives the loan application. The applicable interest rate shall be set forth in the loan agreement. The Plan Administrator shall provide any Participant who requests a loan with disclosure of interest rate information required by Regulation Z of the Federal Reserve Board promulgated pursuant to the Truth in Lending Act, 15 U.S.C. Section 1601, et seq.
(d) As security for such loan, the Participant shall pledge the portion of his or her Account Value represented by the loan and earnings thereon (as set forth in the promissory note representing the loan). The Plan Administrator shall have the rights of a secured creditor under the Uniform Commercial Code and otherwise at law with respect to any portion of the Participant's Account pledged as security. If any amount is outstanding upon the occurrence of an event giving rise to a withdrawal or distribution under this Plan and such withdrawal or distribution would require distribution of a secured portion of the Account, the amount of the loan that would become unsecured shall be charged against such withdrawal or distribution and paid from and upon such distribution or withdrawal. If a Participant does not repay the amount of any loan made hereunder within the specified time, (i) the Plan Administrator shall report the default as a distribution for federal income tax purposes, and (ii) the Plan Administrator shall cause the amount of the unpaid debt (including any interest thereon) to be deducted from the secured portion of the Account, as soon as a distribution or withdrawal is legally permitted from such portion of the Account (without regard to limitations in the Plan that are more restrictive than required by the Code). If the amount of such interest, payment or distribution is not sufficient to repay the unpaid balance of said debt, the Participant shall remain liable for said remaining debt.
(e) Loan repayments will be credited to the Participant's then current investment elections. If the Participant ceases making contributions to the Plan, repayments will be credited pursuant to the Participant's most recent investment elections. If the Participant has not made post-1983 contributions to the Plan, repayments will be credited to the Stable Value Option. Notwithstanding anything to the contrary in this Section 9.7(e), effective October 1, 1994, if any of a Participant's loan funds were drawn from the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, a percentage of each loan repayment, equal to the percentage of loan funds that were drawn from the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, shall be credited to the Stock Account, unless the restrictions in Section 5.3 are no longer applicable.
Appears in 1 contract
Loans to Participants. (a) An Active Participant receiving If an Employer has specified in its Adoption Agreement that loans may be made pursuant to this Section 7.10, then upon application of a regular paycheck from the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance payan Employee, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator may direct the Trustee to lend to the Participant such amount or its designees in their sole discretion. In no event shall amounts as the amount of the loan be less than $1,000Plan Administrator may determine, and the amount of the loan, when added to provided that the aggregate amount of all Plan loans to the Participant then outstandingoutstanding loans, may including accrued interest thereon, shall not exceed the lesser of:
of (ia) $50,000, 50,000 reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan during the one-one year period ending on the day before the date on which such loan was is made, over (B) the outstanding balance of loans from the Plan on the date the loan is made, or (b) fifty percent (50%) of the sum of the vested portion of the Participant's Accounts. For the purpose of the above limitation, all loans from all plans of the Employer and any Related Employers are aggregated. The Plan Administrator shall adopt a written loan program and have the sole authority and duty to determine whether any loan complies with the Code and other Plan requirements, and the Trustee shall have no duty to determine any such compliance. Each loan to Participants shall meet the following requirements as well as any requirements set forth in the written loan program:
(i) Loans shall be made available to all Participants on which such loan was made; ora reasonably equivalent basis.
(ii) oneLoans shall not be made available to Highly Compensated Employees (as defined in Section 414(q) of the Code) in an amount greater than the amount made available to other Participants.
(iii) Loans shall be evidenced by the promissory notes of the Participants, shall be adequately secured and shall bear a reasonable interest rate.
(iv) In the case of a Transferee Plan or a Money Purchase Plan, a Participant's interest in the Trust may be used to secure said loan only if the Participant obtains the consent of his spouse, if any, to use his interest in the Trust as security for the loan. Spousal consent shall be obtained no earlier than the beginning of the ninety-half day period that ends on the date on which the loan is to be secured. The consent must be in writing, must acknowledge the effect of the loan, and must be witnessed by a Plan representative or notary public and consent shall thereafter be binding with respect to the consenting spouse or any subsequent spouse with respect to the loan. A new spousal consent shall be required if the Participant's vested Account Value on interest in the date Trust shall be used as security for renegotiation, extension, renewal, or other revision of the loan.
(bv) Loans made In the event of default, foreclosure on the note and attachment of security will not occur until a distributable event occurs under the Plan.
(vi) Each loan shall by its terms require that repayment (principal and interest) be amortized in level payments, not less frequently than quarterly, over a period not less than twelve (12) months or more than sixty (60) months from the date of the loan, or if the loan is used to Participants for purposes other than for acquire any dwelling unit which within a reasonable time is to be used (determined at the purchase time such loan is made) as a principal residence of the Participant's principal residence , over a period not extending beyond 180 months or such shorter period of time as the Plan Administrator specifies in properly adopted loan procedures from time to time.
(vii) No loans shall be for terms made to a Participant who is an Owner-Employee or a shareholder-employee. For purposes of not less than one this requirement, a shareholder-employee means an employee or officer of a Subchapter S corporation who owns (1or is considered as owning within the meaning of Section 318(a)(1) nor of the Code), on any day during the taxable year of such corporation, more than five percent (5%) yearsof the outstanding stock of such corporation.
(viii) The minimum amount of any loan shall be the amount set forth in the Adoption Agreement.
(ix) A Participant may not request a loan in the same processing period that he requests an in-service withdrawal. Loans Each loan made hereunder shall be deemed to Participants be a separate investment and shall be credited to a separate loan account for the purchase benefit of the borrowing Participant, in which event all payments of interest and principal shall be credited to such Participant's account. Amounts credited to such Participant's separate loan account as a result of payments of interest and principal shall be reinvested as soon as practicable in accordance with the Participant's or the Plan Administrator's investment elections pursuant to Article VI. Amounts credited to such Participant's separate loan account as a result of payments of interest and principal residence shall be for terms reinvested as soon as practicable by the Trustee in accordance with the provisions of not less than one (1) nor more than thirty (30) yearsSection 10.3. Effective January 1, 1999, If any part or all of the amount standing to the account of a Participant shall only be permitted become distributable to have outstanding one (1) principal residence such Participant or his Beneficiary while a loan and one (1) general purpose loan. Notwithstanding to such Participant under this Section is outstanding, the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until Trustee may apply the last amount of such pre-January 1distribution in payment of the entire outstanding loan principal, 1999 general purpose loans whether or not then due, and any interest theretofore accrued, before distributing the balance, if any, to the Participant or his Beneficiary. If a valid spousal consent has been paid off.
obtained in accordance with paragraph (civ) Any loan to a Participant hereunder shall be considered an investment above or is not required, then, notwithstanding any other provision of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Accountthis Plan, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in vested account balance used as a security interest held by the Stock Account Plan by reason of a loan outstanding to the Participant shall be taken into account for purposes of determining the amount of the account balance payable at the time of death or distribution, but only if the reduction is used as provided under Section 5.3, repayment of the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion loan. If less than 100% of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject vested account balance (determined without regard to the schedule in the preceding sentence) is payable to the surviving spouse, funds for a loan will be obtained by liquidating then the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan account balance shall be equal adjusted by first reducing the vested account balance by the amount of the security used as repayment of the loan, and then determining the benefit payable to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect at the time the Plan Administratorsurviving spouse.
Appears in 1 contract
Loans to Participants. (a) An Active Participant receiving a regular paycheck from the Employer may apply for one or more loans from the Plan. A Participant Upon application by an Employee who is on leave (with a Participant or without pay) or who is receiving longany other party-term disability benefits or severance payin-interest, as well as retireesdefined in Section 3(14) of ERISA, temporary employees the Trustee may lend such Employee or other party-in-interest an amount such that the aggregate of all of his outstanding loans under this Plan and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved all other plans maintained by the Plan Administrator or its designees in their sole discretion. In no event shall the amount of the loan be less than $1,000, and the amount of the loan, when added to the aggregate amount of all Plan loans to the Participant then outstanding, may Company does not exceed the lesser of:
: (i1) fifty thousand dollars ($50,000, ) (reduced by the excess (excess, if any) , of (A) the highest outstanding balance of loans from the Plan and all other plans maintained by the Company during the one-one (1) year period ending on the day before the date on which such loan was made, is made over (B) the outstanding balance of loans from the Plan and all other plans maintained by the Company on the date on which such loan was is made); or
or (ii2) an amount which does not exceed one-half (1/2) of the Participant's vested Account Value on interest of his Accrued Benefit, if any, under the Plan as of the date on which the loan is approved. All loans shall follow a uniform, nondiscriminatory policy. Loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Employees. In addition to such rules and regulations as the Plan Administrator may adopt, all loans shall comply with the following terms and conditions:
(a) An application for a loan by an Employee or other party-in-interest shall be made in writing to the Plan Administrator, whose action thereon shall be final. The Plan Administrator shall specify the form of the loanapplication and any supporting data required.
(b) Loans made to Participants The period of repayment for purposes other than for the purchase of the Participant's principal residence any loan shall be for terms of not less than one (1) nor more than five (5) years. Loans made , unless the loan is used to Participants for acquire a dwelling unit which within a reasonable time shall be used as the purchase principal residence of the Participant's principal residence Employee or other party-in-interest, in which case the period of repayment shall be for terms of determined by the Plan Administrator but shall not less be greater than one twenty (1) nor more than thirty (3020) years. Effective January 1Loans shall be repayable in substantially equal amortized installments of both principal and interest payable not less frequently than quarterly. Loans to Employees shall be repaid through automatic payroll deduction, 1999and for parties-in-interest who are not Employees, on such other terms and conditions as the Plan Administrator deems appropriate. To the extent that such loan is unpaid at the time a Participant distribution of such Participant's Accrued Benefit becomes payable, such unpaid amount shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loandeducted from the amount otherwise payable from his Accrued Benefit. Notwithstanding the foregoing, a no unpaid amount shall be deducted from the amount otherwise payable from the Accrued Benefit of any Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (1) becomes a Transferred Participant (as defined in Section 7.2(e)); (2) general purpose loans elects pursuant to Section 8.10 of this Plan to designate a direct rollover of his account balance in the Plan, including the outstanding loan note, to a qualified retirement plan maintained by Mosaic InfoForce, L.P. (the "Mosaic Plan"); (3) acknowledges the Mosaic Plan as the new obligee of the loan note involved in the direct rollover; and (4) accepts that the Mosaic Plan will administer the outstanding loan balance of the Participant pursuant to and in accordance with the same terms and conditions to which the loan note was subject prior to the direct rollover, until the last of such pre-January 1, 1999 general purpose loans has been paid off.
(c) outstanding loan note is satisfied. Any loan to a Participant hereunder described in this Section 15.1 shall be considered an investment of the Participant's Account, and loan funds will be drawn account from the following portions of the Participant's total Account which it was borrowed. Such account shall not share in the following order: Money Purchase Account, allocation of earnings under the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject Plan to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The extent of such loan.
(c) Each loan shall bear interest at a rate which is the rate being charged by the area banking businesses for similar well-secured loans.
(d) Each loan shall be supported by collateral equal to no more than fifty percent (50%) of the Employee's or other party-in-interest's entire vested interest in the Trust. A loan also shall be supported by the Employee's or other party-in-interest's promissory note for the period amount of the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department loan, including interest, payable to the order of Labor Regulations Section 2550.408b-1the Trustee. The promissory note shall require that the unpaid principal and interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for will become due and payable if a loan payment is not made by the last working day of the month preceding calendar year quarter following the date calendar year quarter in which the installment was due and owing. In the event of default, foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan.
(e) Each loan plus shall be in an amount not less than one thousand dollars ($1,000.00) and shall be made in increments of not less than ten dollars ($10.00). No more than one (1%. The interest rate in effect ) loan may be outstanding at any one time.
(f) Each loan shall be for the entire term a period of the loan will be the rate in effect at the time the Plan Administratornot less than six (6) months.
Appears in 1 contract
Samples: 401(k) Retirement Savings Plan (Information Resources Inc)
Loans to Participants. The Administrator may, in its sole discretion, establish a loan program and direct the Trustee to make a loan to a Participant or Beneficiary, other than shareholder-Employees or Owner-Employees.
(aA) An Active Participant receiving a regular paycheck from Loans made pursuant to this program shall be subject to such rules as the Administrator, in its sole discretion, shall adopt, provided that such rules and regulations do not discriminate in favor of officers, shareholders or highly compensated Employees of the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, that loans shall be approved available to all Participants or Beneficiaries on a non-discriminatory basis. No loans shall be made under this Section 7.1 to any shareholder-Employees or Owner-Employees.
(B) Any loan to a Participant made under this program shall comply with the following terms and conditions:
(1) An application for a loan shall be made in writing to the Administrator, whose action thereon shall be final.
(2) The loan shall be adequately secured, pursuant to Section 5, below.
(3) The loan shall bear a reasonable rate of interest, as determined by the Plan Administrator or in its designees in their sole discretion. In The interest rate shall be comparable to the rate charged by commercial lenders in the geographical area of the Employer for similar types of loans, as determined by conditions customarily taken into account by such lenders in the making of similar types of loans.
(4) A loan shall be made for fixed period of time, as determined by the Plan Administrator in its sole discretion, which in no event shall exceed five (5) Years from the amount date of such loan, except that such five (5) Year repayment rule shall not apply to any loan used to acquire a dwelling unit which, within a reasonable period of time, will be used as a principal residence of the Participant. Security for Loans to Participants is described in section 10.6.
(5) No distribution shall be made to any Active Participant, inactive Participant, Former Participant or Beneficiary of any such Participant unless and until all unpaid loans, including accrued interest thereon, have been satisfied.
(6) Loans shall be made available to all Participants and Beneficiaries on a reasonably equivalent basis.
(7) No loan to any Participant or Beneficiary can be less than $1,000, and made to the extent that the amount of the loan, when added to the aggregate amount outstanding balance of all Plan other loans to the Participant then outstandingor Beneficiary, may not would exceed the lesser of:
: (ia) $50,000, 50,000 reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan during the one-one year period ending on the day before the date on which such loan was is made, over (B) the outstanding balance of loans from the Plan on the date on which such the loan was is made; or
, or (iib) one-half the value of the vested account balance of the Participant's vested Account Value . For the purpose of the above limitation, all loans from all qualified plans of the Affiliated Employers are aggregated.
(8) In the event of default, foreclosure on and attachment of security will not occur until a distributable event occurs in the Plan.
(9) Loans shall not be made available to highly compensated employees (as defined in Section 414(g) of the Code) in an amount greater than the amount made available to other Employees.
(10) A Participant must obtain the consent of his Spouse, if any, to use of the Accrued Benefit as security for the loan. Spousal consent shall be obtained no earlier than the beginning of the 90-day period that ends on the date on which the loan is to be so secured. The consent must be in writing, must acknowledge the effect of the loan., and must be witnessed by a Plan representative or notary public. Such consent shall thereafter be binding with respect to the consenting Defined Contribution Plan and Trust Document
(bC) Loans No loan may be made to Participants for any Owner Employee or shareholder Employee. For purposes other than for of this requirement, a shareholder Employee means an Employee or officer of an electing small business (Sub Chapter S) corporation who owns (or is considered as owning within the purchase meaning of Code Section 318(a)(1)), on any day during the Participant's principal residence shall be for terms taxable year of not less than one (1) nor such corporation, more than five percent (5%) years. Loans made to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off.
(c) Any loan to a Participant hereunder shall be considered an investment stock of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect at the time the Plan Administratorcorporation.
Appears in 1 contract
Samples: Tax Sheltered Custodial Account Agreement (New England Funds Trust I)
Loans to Participants. (a) An Active If specified in the Adoption Agreement, the Trustee (or the Administrator if the Trustee is a nondiscretionary Trustee or if loans are treated as Participant receiving a regular paycheck from directed investments pursuant to the Employer may apply for one Adoption Agreement) may, in the Trustee's (or, if applicable, the Administrator's) sole discretion, make loans to Participants or more loans from Beneficiaries under the Plan. A Participant who is on leave following circumstances: (with or without pay1) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator or its designees made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to Highly Compensated Employees in their sole discretion. In no event shall an amount greater than the amount made available to other Participants; (3) loans shall bear a reasonable rate of the interest; (4) loans shall be adequately secured; and (5) loans shall provide for periodic repayment over a reasonable period of time. Furthermore, no Participant loan be less than $1,000, and the amount of the loan, when added to the aggregate amount of all Plan loans to the Participant then outstanding, may not shall exceed the lesser of:
(i) $50,000, reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan during the one-year period ending on the day before the date on which such loan was made, over (B) the outstanding balance of loans from the Plan on the date on which such loan was made; or
(ii) one-half of the Participant's vested Account Value on Vested interest in the date of the loanPlan.
(b) Loans shall not be made to Participants any Shareholder-Employee or Owner-Employee (including an Owner Employee's family members as defined in Code Section 267(c)(4)) unless an exemption for purposes other than for the purchase of the Participant's principal residence shall such loan is obtained pursuant to Act Section 408 or such loan would otherwise not be for terms of not less than one (1) nor more than five (5) years. Loans made a prohibited transaction pursuant to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan Code Section 4975 and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid offAct Section 408.
(c) Any An assignment or pledge of any portion of a Participant's interest in the Plan and a loan, pledge, or assignment with respect to any insurance Contract purchased under the Plan, shall be treated as a loan to under this Section.
(d) If the Vested interest of a Participant hereunder shall be considered an investment is used to secure any loan made pursuant to this Section, then the written (or such other form as permitted by the IRS) consent of the Participant's Accountspouse shall be required in a manner consistent with Section 6.5(a), and provided the spousal consent requirements of such Section apply to the Plan. Such consent must be obtained within the 90-day period prior to the date the loan funds is made. Any security interest held by the Plan by reason of an outstanding loan to the Participant or Former Participant shall be taken into account in determining the amount of the death benefit or Pre-Retirement Survivor Annuity. However, unless the loan program established pursuant to this Section provides otherwise, no spousal consent shall be required under this paragraph if the total interest subject to the security is not in excess of $5,000 (or, $3,500 effective for loans made prior to the later of the first day of the first Plan Year beginning after August 5, 1997, or the date specified in the Adoption Agreement).
(e) The Administrator shall be authorized to establish a participant loan program to provide for loans under the Plan. The loan program shall be established in accordance with Department of Labor Regulation Section 2550.408(b)-1(d)(2) providing for loans by the Plan to parties-in-interest under said Plan, such as Participants or Beneficiaries. In order for the Administrator to implement such loan program, a separate written document forming a part of this Plan must be adopted, which document shall specifically include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be drawn from approved or denied;
(4) limitations, if any, on the following portions types and amounts of loans offered;
(5) the Participant's total Account procedure under the program for determining a reasonable rate of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to preserve Plan assets in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested event such default.
(f) Notwithstanding anything in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject this Plan to the schedule in the preceding sentencecontrary, funds for if a Participant or Beneficiary defaults on a loan will be obtained made pursuant to this Section that is secured by liquidating the Participant's interest in the various Investment Funds in which the Plan, then a Participant's Accounts are invested pro rata. The loan interest may be offset by the amount subject to the security to the extent there is a distributable event permitted by the Code or Regulations.
(g) Notwithstanding anything in this Section to the contrary, if this is an amendment and restatement of an existing Plan, any loans made prior to the date this amendment and restatement is adopted shall bear interest for be subject to the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department terms of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect at the time the Plan Administratorsuch loan was made.
Appears in 1 contract
Samples: 401(k) Profit Sharing Plan Adoption Agreement (Wayne Savings Bancshares Inc /De/)
Loans to Participants. (a) An Active Participant receiving a regular paycheck from If the Employer may apply has elected in the Adoption Agreement to permit loans to Participants, the Trustee shall, at the Employer's direction, make loans to Participants, upon written application of the Participant and consent in writing of the Participant's Spouse, in accordance with the following rules: (i) loans shall be made available to all Participants on a reasonably equivalent basis; (ii) loans shall not be made available to highly compensated Employees, officers, or shareholders in an amount greater than the amount made available to other Participants; (iii) loans shall bear a reasonable rate of interest; (iv) loans shall be adequately secured; and (v) loans shall provide for one or more periodic repayments over a reasonable period of time as provided in Section 8.10(c) below. Spousal consent to such loan must be received during the ninety day period ending on the date on which the loan is secured. Notwithstanding the foregoing, no loans from the Plan. A shall be made to any Participant who is an Owner-Employee or a shareholder-employee of a Subchapter S corporation (an employee or officer of the Subchapter S corporation who owns, or is considered as owning within the meaning of Code Section 318(a)(1), on leave any day during the taxable year of the corporation, more than 5% of the outstanding stock of the corporation).
(with or without payb) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject Loans made pursuant to limitations described herein, loans this Section 8.10 shall be approved by the Plan Administrator or its designees in their sole discretion. In no event shall the amount of the loan be less than $1,000, and the amount of the loan, when added limited to the aggregate amount of all Plan loans to the Participant then outstanding, may not exceed the lesser of:
(i) $50,000, reduced by the excess (if any) of --
(AI) the highest outstanding balance of loans from the Plan plan during the one1-year period ending on the day before the date on which such loan was made, over over
(BII) the outstanding balance of loans from the Plan plan on the date on which such loan was made; , or
(ii) The greater of (A) one-half (1/2) of the vested interest of the Participant's vested Employer Contributions Account, Salary Deferral Account Value and Rollover Contributions Account (not taking into account any deductible voluntary contributions rolled over into the Rollover Contributions Account) maintained on the date behalf of the loan.Participant under the Plan, or (B) $10,000, or
(biii) Loans made to Participants for purposes other than for the purchase total of the Participant's Accounts. For purposes of the foregoing limitations, all loans from all plans maintained by the Employer and other members of the group of employers described in Code Sections 414(b), 414(c) and 414(m) shall be aggregated. Notwithstanding the foregoing limitations, the Employer may further limit the amount that may be loaned to a Participant in order to maintain a sufficient reserve for income taxes which would have to be withheld from the Participant's Account in the event the loan is deemed to be a distribution, pursuant to Code Section 72(p).
(c) Loans shall provide for periodic repayment at least quarterly over a period not to exceed five (5) years; provided, however, loans used to acquire any dwelling unit which, within a reasonable time, is to be used (determined at the time the loan is made) as a principal residence of the Participant or a member of his or her family (within the meaning of Section 267(c)(4) of the Code), shall be provide for terms periodic repayment at least quarterly over a reasonable period of not less than one (1) nor more than time that may exceed five (5) years. Loans made Not withstanding the foregoing, loans shall not be granted to Participants any Participant that provide for the purchase of a repayment period extending beyond the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid offNormal Retirement Date.
(cd) Any loan to No more than 50% of a Participant hereunder shall be considered an investment of the Participant's vested interest in his or her Employer Contributions Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Salary Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Employee Contributions Account, and Rollover AccountContributions Account may be used to secure a participant loan. Subject Loans in excess of the 500/a limit must have outside collateral provided to secure that excess.
(e) If the Participant terminates employment with the Employer or files for relief under the United States Bankruptcy Code or the Plan is terminated prior to the schedule in full repayment of the preceding sentenceloan, funds for a the loan will shall become immediately due and payable and shall be obtained by liquidating repaid from the Participant's Employer Contributions Account.
(f) A Participant loan under this Section 8.10 shall be deemed to have been made from a Participant's Account and such loan shall be deemed to be a directed investment which shall be segregated and administrated as a separate investment of such Participant in accordance with the provisions of section 10.02 of Article X. The interest in the various Investment Funds in which paid m the Participant's Accounts are invested pro rata. The loan shall bear interest be accounted for separately and credited to the period directed investment account of the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans Participant in accordance with Department the provisions of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day 10.02(e) of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect at the time the Plan AdministratorArticle X.
Appears in 1 contract
Loans to Participants. (a) An Active Participant receiving a regular paycheck from The Trustee is directed to make loans to Participants and Beneficiaries under the Employer may apply for one or more loans from the Plan. A Participant who is on leave following circumstances: (with or without pay1) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator or its designees made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to Highly Compensated Employees in their sole discretion. In no event shall an amount greater than the amount made available to other Participants and Beneficiaries; (3) loans shall bear a reasonable rate of the loan interest; (4) loans shall be less than $1,000, adequately secured; and the amount (5) shall provide for repayment over a reasonable period of the loan, time.
(b) Loans made pursuant to this Section (when added to the aggregate amount outstanding balance of all other loans made by the Plan loans to the Participant then outstanding, may not exceed Participant) shall be limited to the lesser of:
(i1) $50,000, 50,000 reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan to the Participant during the one-one year period ending on the day before the date on which such loan was is made, over (B) the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made; , or
(ii2) one-half (1/2) of the Participant's vested Account Value on the date present value of the loannon-forfeitable accrued benefit of the Participant under the Plan. For purposes of this limit, all plans of the Employer shall be considered one plan. Additionally, with respect to any loan made prior to January 1, 1987, the $50,000 limit specified in (1) above shall be unreduced. Only two outstanding loans will be allowed for each Participant. The rate of interest charged should be published Wall Street Journal Prime Rate plus one percent.
(bc) Loans shall provide for level amortization with payments to be made to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less frequently than one (1) nor more than quarterly over a period not to exceed five (5) years. Loans made However, loans used to Participants for acquire any dwelling unit which, within a reasonable time, is to be used (determined at the purchase time the loan is made) as a principal residence of the Participant's principal residence Participant shall be provide for terms periodic repayment over a reasonable period of not less than one time that may exceed five (1) nor more than thirty (305) years. Effective January 1, 1999For this purpose, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loanhas the same meaning as a principal residence under Code Section 1034. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted made prior to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off.
1987 which are used to acquire, construct, reconstruct or substantially rehabilitate any dwelling unit which, within a reasonable period of time is to be used (c) Any loan to a Participant hereunder shall be considered an investment of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect determined at the time the loan is made) as a principal residence of the Participant or a member of his family (within the meaning of Code Section 267(c)(4)) may provide for periodic repayment over a reasonable period of time that may exceed five (5) years. Additionally, loans made prior to January 1, 1987, may provide for periodic payments which are made less frequently than quarterly and which do not necessarily result in level amortization. Loan repayments will be suspended under this Plan Administratoras permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed on or after the last day of the first Plan Year beginning after December 31, 1988 shall be made pursuant to a Participant loan program. Such loan program shall be established in writing and must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered;
(5) the procedure under the program for determining a reasonable rate of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to preserve Plan assets. Such Participant loan program shall be contained in a separate written document which, when properly executed, is hereby incorporated by reference and made a part of the Plan. Furthermore, such Participant loan program may be modified or amended in writing from time to time without the necessity of amending this Section.
Appears in 1 contract
Samples: 401(k) Profit Sharing Plan and Trust Agreement (Ameritrade Holding Corp)
Loans to Participants. (a) An Active Participant receiving a regular paycheck from the Employer may apply for one or more loans from the Plan. A Participant Upon application by an Employee who is on leave (with a Participant or without pay) or who is receiving longany other party-term disability benefits or severance payin-interest, as well as retireesdefined in Section 3(14) of ERISA, temporary employees the Trustee may lend such Employee or other party-in- interest an amount such that the aggregate of all of his outstanding loans under this Plan and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved all other plans maintained by the Plan Administrator or its designees in their sole discretion. In no event shall the amount of the loan be less than $1,000, and the amount of the loan, when added to the aggregate amount of all Plan loans to the Participant then outstanding, may Company does not exceed the lesser of:
: (i1) fifty thousand dollars ($50,000, ) (reduced by the excess (excess, if any) , of (A) the highest outstanding balance of loans from the Plan and all other plans maintained by the Company during the one-one (1) year period ending on the day before the date on which such loan was made, is made over (B) the outstanding balance of loans from the Plan and all other plans maintained by the Company on the date on which such loan was is made); or
or (ii2) an amount which does not exceed one-half (1/2) of the Participant's vested Account Value on interest of his Accrued Benefit, if any, under the Plan as of the date on which the loan is approved. All loans shall follow a uniform, nondiscriminatory policy. Loans shall not be made available to Highly Compensated Employees in an amount greater than the amount made available to other Employees. In addition to such rules and regulations as the Plan Administrator may adopt, all loans shall comply with the following terms and conditions:
(a) An application for a loan by an Employee or other party-in-interest shall be made in writing to the Plan Administrator, whose action thereon shall be final. The Plan Administrator shall specify the form of the loanapplication and any supporting data required.
(b) Loans made to Participants The period of repayment for purposes other than for the purchase of the Participant's principal residence any loan shall be for terms of not less than one (1) nor more than five (5) years. Loans made , unless the loan is used to Participants for acquire a dwelling unit which within a reasonable time shall be used as the purchase principal residence of the Participant's principal residence Employee or other party-in-interest, in which case the period of repayment shall be for terms of determined by the Plan Administrator but shall not less be greater than one twenty (1) nor more than thirty (3020) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 Loans shall be permitted repayable in substantially equal amortized installments of both principal and interest payable not less frequently than quarterly. Loans to have two (2) general purpose loans outstanding until Employees shall be repaid through automatic payroll deduction, and for parties-in-interest who are not Employees, on such other terms and conditions as the last Plan Administrator deems appropriate. To the extent that such loan is unpaid at the time a distribution of such pre-January 1Participant's Accrued Benefit becomes payable, 1999 general purpose loans has been paid off.
(c) such unpaid amount shall be deducted from the amount otherwise payable from his Accrued Benefit. Any loan to a Participant hereunder described in this Section 15.1 shall be considered an investment of the Participant's Account, and loan funds will be drawn account from the following portions of the Participant's total Account which it was borrowed. Such account shall not share in the following order: Money Purchase Account, allocation of earnings under the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject Plan to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The extent of such loan.
(c) Each loan shall bear interest at a rate which is the rate being charged by the area banking businesses for similar well-secured loans.
(d) Each loan shall be supported by collateral equal to no more than fifty percent (50%) of the Employee's or other party-in-interest's entire vested interest in the Trust. A loan also shall be supported by the Employee's or other party-in-interest's promissory note for the period amount of the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department loan, including interest, payable to the order of Labor Regulations Section 2550.408b-1the Trustee. The promissory note shall require that the unpaid principal and interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for will become due and payable if a loan payment is not made by the last working day of the month preceding calendar year quarter following the date calendar year quarter in which the installment was due and owing. In the event of default, foreclosure on the note and attachment of security will not occur until a distributable event occurs in the Plan.
(e) Each loan plus shall be in an amount not less than one thousand dollars ($1,000.00) and shall be made in increments of not less than ten dollars ($10.00). No more than one (1%. The interest rate in effect ) loan may be outstanding at any one time.
(f) Each loan shall be for the entire term a period of the loan will be the rate in effect at the time the Plan Administratornot less than six (6) months.
Appears in 1 contract
Samples: 401(k) Retirement Savings Plan Amendment (Information Resources Inc)
Loans to Participants. (a) An Active Participant receiving a regular paycheck from The Trustee may, in the Employer may apply for one or more Trustee's discretion, make loans from to Participants and Beneficiaries under the Plan. A Participant who is on leave following circumstances: (with or without pay1) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator or its designees made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to Highly Compensated Employees in their sole discretion. In no event shall an amount greater than the amount made available to other Participants and Beneficiaries; (3) loans shall bear a reasonable rate of the loan interest; (4) loans shall be less than $1,000, adequately secured; and the amount (5) loans shall provide for periodic repayment over a reasonable period of the loan, time.
(b) Loans made pursuant to this Section (when added to the aggregate amount outstanding balance of all other loans made by the Plan loans to the Participant then outstandingParticipant) may, may not exceed in accordance with a uniform and nondiscriminatory policy established by the Administrator, be limited to the lesser of:
(i1) $50,000, 50,000 reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan to the Participant during the one-one year period ending on the day before the date on which such loan was is made, over (B) the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made; , or
(ii2) one-half (1/2) of the Participant's vested Account Value on the date present value of the loannon-forfeitable accrued benefit of the Participant under the Plan (excluding Employee Stock Ownership Transfer Account). For purposes of this limit, all plans of the Employer shall be considered one plan.
(bc) Loans shall provide for level amortization with payments to be made to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less frequently than one (1) nor more than quarterly over a period not to exceed five (5) years. Loans made However, loans used to Participants for acquire any dwelling unit which, within a reasonable time, is to be used (determined at the purchase time the loan is made) as a "principal residence" of the Participant's Participant shall provide for periodic repayment over a reasonable period of time that may exceed five (5) years. For this purpose, a "principal residence residence" has the same meaning as a "principal residence" under Code Section 1034. Loan repayments may be suspended under this Plan as permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed shall be for terms of made pursuant to a Participant loan program. Such loan program shall be established in writing and must include, but need not less than one be limited to, the following:
(1) nor more than thirty (30) years. Effective January 1, 1999, a the identity of the person or positions authorized to administer the Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two program;
(2) general purpose a procedure for applying for loans;
(3) the basis on which loans outstanding until will be approved or denied;
(4) limitations, if any, on the last types and amounts of loans offered;
(5) the procedure under the program for determining a reasonable rate of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to preserve Plan assets. Such Participant loan program shall be contained in a separate written document which, when properly executed, is hereby incorporated by reference and made a part of the Plan. Furthermore, such pre-January 1, 1999 general purpose loans has been paid offParticipant loan program may be modified or amended in writing from time to time without the necessity of amending this Section.
(ce) Any loan Notwithstanding anything in this Plan to the contrary, if a Participant hereunder or Beneficiary defaults on a loan made pursuant to this Section, then the loan default will be a distributable event to the extent permitted by the Code and Regulations.
(f) Notwithstanding anything in this Section to the contrary, any loans made prior to the date this amendment and restatement is adopted shall be considered an investment subject to the terms of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate plan in effect at the time the Plan Administratorsuch loan was made.
Appears in 1 contract
Samples: 401(k) Profit Sharing Plan Agreement (Winton Financial Corp)
Loans to Participants. The Benefits Committee, upon request by a Participant (including a Participant under subsection 4.4 who is actively employed by an Employer or a Related Company or who is a “party in interest” with respect to the Plan (as such term is defined in section 3(14) of ERISA), in such form as the Benefits Committee may require, may authorize a loan to be made to the Participant from his interest in the Plan, in increments of $500, subject to the following:
(a) An Active No loan shall be made to a Participant receiving a regular paycheck from if, immediately after such loan, the sum of the outstanding balances (including principal and interest) of any loan made to him under this Plan and under any other qualified retirement plan maintained by the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance payRelated Company would exceed $50,000, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved reduced by the Plan Administrator or its designees in their sole discretion. In no event shall the amount of the loan be less than $1,000excess, and the amount of the loanif any, when added to the aggregate amount of all Plan loans to the Participant then outstanding, may not exceed the lesser of:
(i) $50,000, reduced by the excess (if any) of (A) the highest outstanding balance of all loans to the Participant from the Plan plans during the one-year period ending on the day immediately before the date on which such the loan was is made, over ; over
(Bii) the outstanding balance of loans from the Plan plans to the Participant on the date on which such loan was is made; or
(ii) and no loan shall be made to a Participant in excess of one-half of the total vested balance of the Participant's vested Account Value on ’s Accounts under the Plan as of the date of the loanloan is made.
(b) Loans made Each loan to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than five (5) years. Loans made to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one charged against the Participant’s Accounts (1) principal residence loan excluding the Matching Account and one (1) general purpose loan. Notwithstanding the foregoingQualified Matching Account), a Participant who had one or more general purpose loans outstanding on December 31pro rata, 1998 and shall be permitted charged against each Investment Fund in which such Accounts are invested in the same ratio as the value of his interest in such Fund with respect to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid offapplicable Account bears to the Participant’s total interest in that Account.
(c) Any loan to a Participant hereunder shall be considered an investment of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The Each loan shall bear interest for the provide for:
(i) a reasonable repayment period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding not more than 5 years from the date of the loan plus 1%. The (or not more than 15 years for a loan used to acquire a dwelling which, within a reasonable period of time, will be used as the Participant’s principal residence);
(ii) a reasonable rate of interest;
(iii) substantially equal payments of principal and interest rate in effect for over the entire term of the loan no less frequently than quarterly; and
(iv) such other terms and conditions as the Benefits Committee shall determine; and shall be evidenced by a written agreement or in such other form as the Benefits Committee may require from time to time in accordance with uniform procedures consistently applied. Notwithstanding any provision of this Section 10 to the contrary, negotiation of a loan check shall evidence the Participant’s acceptance of and consent to be bound by the terms and conditions of such loan.
(d) Promissory notes or other indicia of outstanding loans shall be held by the Trustee in the Loan Fund, unless such duty is delegated by the Trustee to the Benefits Committee.
(e) Payments of principal and interest to the Plan with respect to any loan to a Participant:
(i) shall reduce the outstanding balance with respect to that loan;
(ii) shall reduce the balance of the Loan Fund holding the promissory note reflecting that loan;
(iii) shall be credited to the Participant’s Accounts pro rata; and
(iv) shall be invested in the Investment Funds (other than the Loan Fund) in accordance with the Participant’s current investment directions.
(f) A Participant’s obligation to repay a loan (or loans) from the Plan shall be secured by that portion of the total vested balance of the Participant’s Accounts equal to the then outstanding balance of the loan plus accrued, but unpaid, interest; provided, however, that in no event shall more than 50% of the value of the total vested balance in the Participant’s Accounts (determined immediately after origination of the loan) be taken into account as security for the outstanding balance of all Plan loans made to the Participant.
(g) Generally, loan repayments will be made by payroll deductions. However, during any period when payroll deduction is not possible or is not permitted under applicable law, repayment will be made by personal check.
(h) The loan may be prepaid in full at any time without penalty.
(i) If the rate in effect outstanding balance of principal and interest on any loan is not paid at the time expiration of its term or upon acceleration in accordance with paragraph (m) next below, or if any required payments of principal and interest on the loan are not paid when due, a delinquency shall occur. If the delinquency is not cured by the last day of the cure period established by the Committee in accordance with uniform procedures adopted by it (which cure period shall not extend beyond the last day of the calendar quarter following the calendar quarter in which the delinquent payment was due), a default shall occur and (i) the entire outstanding balance of the loan (including accrued but unpaid interest) shall be treated as a deemed distribution for tax purposes in accordance with applicable Treasury regulations; and (ii) the Committee shall apply all or a portion of the Participant’s vested interest in the Plan Administratorin satisfaction of such outstanding obligation, but only to the extent that such vested interest (or portion thereof) is then distributable under applicable provisions of the Code. If necessary to satisfy the entire outstanding obligation, such application of the vested interest may be executed in a series of actions as amounts credited to the Participant’s Accounts become distributable.
(j) If distribution is to be made to a Beneficiary in accordance with subsection 11.2, any outstanding promissory note of the Participant shall be canceled and the unpaid principal of the loan, together with any accrued interest thereon, shall be treated as a distribution to or on behalf of the Participant immediately prior to commencement of distribution to the Beneficiary.
(k) A participant may have only one loan outstanding at any time.
(l) The Benefits Committee shall establish uniform procedures for applying for a loan, evaluating loan applications and setting reasonable rates of interest.
(m) If a Participant commences distribution of his Accounts pursuant to subsection 11.1, the entire outstanding balance of his loan shall become immediately due and payable.
Appears in 1 contract
Samples: Hourly Employees Retirement Savings Plan (Gatx Corp)
Loans to Participants. (a) Based upon the following terms and conditions, which may be changed from time to time, the Company may make loans to Participants under this Contract in the manner prescribed by the Company, and the Participant shall furnish such information as the Company shall require in connection with the loan application. An Active Participant receiving a regular paycheck from the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply application for a loan. Subject to limitations described herein, loans loan by a Participant shall be approved made in writing to the Company.
(1) The amount of any loan shall not be less than an established minimum that is in effect at the time the loan is made. The amount of any loan shall not exceed the portion of a Participant’s vested Account Balance that is then in the Interest Accumulation Account reduced by the Plan Administrator or its designees in their sole discretion. In no event shall amounts determined by the amount Company to cover contingency expenses over the term of the loan and any costs that may be less than $1,000incurred in connection with any default in repayment of the loan. Only to the extent that such reduced portion of the Participant’s vested Account Balance in the Interest Accumulation Account is sufficient, and the amount of the loan, when added to the aggregate amount balance of the Participant’s outstanding loans under this Contract and all Plan loans to other plans of the Participant then outstandingEmployer, may must not exceed $10,000 or the lesser of:
(ia) $50,000, 50,000 reduced by the any excess (if any) of (Ai) the highest outstanding balance of loans from the Plan such plans during the one-year period ending on the day before the date on which such the loan was made, under this Contract is to be made to the Participant over (Bii) the outstanding balance of loans from the Plan such plans on the date on which such the loan was madeunder this Contract is to be made to the Participant; orand
(iib) one-half of the value of the Participant's ’s vested interest under all plans of the Employer that are funded through contracts issued by the Company.
(2) As of the date a loan is made to a Participant under this Contract, the Company shall maintain as collateral for such loan a portion of the Participant’s vested Account Value Balance that is then in the Interest Accumulation Account. This portion shall be referred to as the “Reserve Amount” and shall be equal to (a) an amount determined by the Company to cover contingency expenses over the term of the loan and to protect against any defaults and (b) the loan principal, as either or both of which may be reduced in accordance with Paragraphs (6) and (7) of this Section 4.13. The Reserve Amount will not be available to the Participant for transfer, withdrawal or any other distribution while there is an outstanding loan balance under this Contract. The rate of interest to be allocated to the balance in the Reserve Amount shall be the greater of (i) 3% and (ii) the lesser of:
(a) the Current Rate of Interest then in effect under this Contract; or
(b) a rate of interest equal to the loan interest rate then in effect less a percentage not greater than 3% that the Company, at its discretion, shall determine. The Company shall have the right to recover the balance of the Reserve Amount as a result of any default in payment on each loan, pursuant to Paragraph (6) of this Section 4.13 and such amounts will no longer be available to the Participant thereafter.
(3) Within a 90-day period immediately before a loan is to be made to a Participant, such Participant must execute a repayment agreement for such loan.
(4) The loan interest rate applicable to a Participant shall be an adjustable rate declared by the Company. In no event shall such interest rate be greater than the higher of (a) the Current Rate of Interest in effect under this Contract at the time the loan is made plus one percentage point or (b) the Monthly Average Corporate yield shown in Xxxxx’x Corporate Bond Yield Averages for the calendar month ending two months before the date on which the rate is determined, published by Xxxxx’x Investors Services, Inc., or any successor, or, if no longer published, a rate which is set by law or by regulation of the insurance supervisory official of the State in which this Contract is delivered. The loan interest rate in effect with respect to a Participant shall be evaluated at least once every twelve months, but not more frequently than once in any three months’ period. If at the time of such evaluation, the rate of interest then applicable to new loans is at least .5% greater or lesser than the loan interest rate applicable to the Participant, the loan interest rate on the Participant’s outstanding loan balance shall then be adjusted to reflect such increase or decrease. A Participant shall receive a statement of the initial loan interest rate and shall receive at least 30 days’ advance written notification of any change in the loan interest rate, provided however that any Participant taking a loan within 30 days of any change in the loan interest rate will be informed of such change on or before the time the loan is made. Such notification shall include a statement in substance of the provisions of this Paragraph (4) that permits an adjustable maximum interest rate on loans established from time to time by the Company as permitted by applicable law and shall specify the frequency at which the interest rate is to be determined by the Company as permitted by law.
(5) Any loans made under this Contract must be repaid within five years, except that, in the case of a loan that is to be used to acquire any dwelling unit that, within a reasonable period of time, is to be used as a principal residence of the Participant, the loan may be repaid over any longer period not in excess of ten years that shall be agreed to in writing by the Participant and the Company at the time the loan is made. In no event shall the repayment agreement provide for payments to be made less frequently than quarterly or for a repayment schedule that does not result in a substantially level amortization of the loan over the applicable term, except as may be provided in Income Tax Regulations promulgated under Section 72(p) of the Internal Revenue Code of 1986. Anything in the preceding paragraph to the contrary notwithstanding, an amount equal to any outstanding loan balance plus interest and any other applicable amounts shall be payable in full on the earliest of:
(a) the date of the loan.Participant’s death;
(b) Loans made to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than five (5) years. Loans made to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off.’s Annuity Commencement Date;
(c) Any the first business day following the expiration of the grace period; and
(d) the date the Plan terminates. Unless the amount of the outstanding balance, plus interest and any late payment penalty, is paid directly to the Company by the Participant or by the Participant’s beneficiary, as the case may be, on or before the applicable date set forth above, the Company shall recover such amount from the Reserve Amount before any distribution of the otherwise remaining Account Balance is required to be made under this Contract.
(6) Except as provided in Paragraph (5) of this Section 4.13, the Participant may prepay at any time the full amount of any outstanding balance of a loan. There will be a thirty-day grace period following each scheduled repayment date for any payment on a loan to a Participant hereunder after which, if such payment has not been made, the full amount of any outstanding balance of the loan shall be considered an investment in default. In the event of default, foreclosure on the repayment agreement and attachment of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for ’s Reserve Amount shall not occur until a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans distributable event occurs under the Plan or is otherwise permitted by applicable law. For purposes of this Section 4.13(6), a distributable event occurs when the Participant attains age 59-1/2, terminates employment, dies or becomes disabled, as defined in Section 4.6.
(7) All installment payments made by a Participant to the Company shall be equal retained by the Company. The Reserve Amount shall be periodically reduced to reflect the amount of any principal repayment or interest payment that is included in any such installment payment.
(8) Upon full repayment of a loan plus interest as described in Paragraphs (5), (6) and (7) of this Section 4.13, and under the terms of the repayment agreement between the Company and the Participant, the balance, if any, of the Reserve Amount shall be made available to the prime interest rate stated Participant for any transfer, withdrawal or distribution that may be made under this Contract.
(9) The Company and the Employer shall have the right to terminate the loan provision under this Section 4.13 at any time provided that such termination does not affect outstanding loans to any Participant. Notice of termination must be given in The Wall Street Journal for the last working day writing 30 days in advance of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect at the time the Plan Administratortermination effective date.
Appears in 1 contract
Samples: Group Annuity Contract (Mutual of America Separate Account No 2)
Loans to Participants. Upon written application of a Participant submitted to the Company at least (a30) An Active days (or such shorter period as the Company allows) prior to a Valuation Date, the Company may direct the Trustees to lend to such Participant receiving a regular paycheck such amount or amounts from the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by his accounts under the Plan Administrator or its designees in their sole discretion. In no event shall the amount up to fifty percent (50%) of the loan be less than $1,000, and the amount total aggregate value of the loanvested portion of such Participant's accounts (determined as of such Valuation Date, when added to provided that the aggregate amount of all outstanding loans, including accrued interest, from the Plan loans to the a Participant then outstanding, may shall not exceed the lesser of:
(i) $50,000, reduced by the excess (if any) amount of (A) the highest outstanding balance of loans from the Plan any loan repayment made during the one-one (1) year period ending on the day before the date on which such loan was is to be made. The minimum amount which may be loaned to a Participant under this Section 7.10 shall be $1,000. A Participant may not have more than three loans outstanding under this Section 7.10 at any given time. Loans shall be made available to all Participants on a reasonably equivalent basis, over (B) except that the outstanding balance Company may make reasonable distinctions based upon credit-worthiness, other obligations of loans from the Plan on Participant and other factors that may adversely affect the date on which such loan was made; or
(ii) one-half ability to assure repayment. Loans approved under this Section 7.10 shall be made as soon as reasonably practicable after the Valuation Date next following timely receipt by the Company of the Participant's vested Account Value on written application. Each such loan shall be made at such reasonable rate of interest as the date Company may determine, and shall be subject to such other terms and conditions as the Company may deem proper, and shall be evidenced by the promissory note of the loan.
Participant and secured by at least fifty percent (b50%) Loans made to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than five (5) years. Loans made to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off.
(c) Any loan to a Participant hereunder shall be considered an investment of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rataPlan. The Each such loan shall bear interest for be repaid by such means as may be authorized by the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan Company, shall be equal to amortized over the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will in level payments made not less frequently than quarterly, and shall be the rate in effect repaid within five (5) years unless such loan is used to acquire a dwelling unit which within a reasonable period of time is to be used (determined at the time the loan is made) as the principal residence of the Participant in which case the repayment period shall not exceed twenty (20) years. Each such loan shall be deemed to be an investment made at the direction of such Participant and shall be credited to a separate investment account for the borrowing Participant. An 89 amount equal to the principal amount of such loan when made shall be charged to the interests of such Participant's accounts as designated by the Participant. Subject to such restrictions as may be applicable to the particular Investment Funds, in the event of a loan of less than the entire balance of a Participant's account, the loan amounts shall be withdrawn from the Investment Funds pro rata in proportion to the interest of such account in each of such Investment Funds. All interest and loan repayments shall be reinvested in the Investment Funds in accordance with the most recent investment election of such Participant with respect to contributions credited to such accounts. All expenses incurred by the Company and the Trustees, including reasonable attorneys' fees and court costs, as a result of a default by a Participant shall be charged against the Participant's accounts. If any loan under this Section 7.10 is in default, as determined in accordance with the procedures established by the Company, when any part or all of the amount standing to the credit of a Participant's accounts becomes distributable to such Participant or his Beneficiary, the Company shall direct the Trustees to apply the amount of such distributable amount in payment of the entire outstanding loan principal, and any interest theretofore accrued, before distributing the balance, if any, to the Participant or his Beneficiary."
B. Except as so amended, the Plan Administratorin all other respects, is hereby confirmed.
Appears in 1 contract
Samples: Deferred Savings Plan and Trust Agreement (Freedom Securities Corp /De/)
Loans to Participants. (a) An Active Participant receiving a regular paycheck from The Trustee may, in the Employer may apply for one or more Trustee’s discretion, make loans from to Participants and Beneficiaries under the Plan. A Participant who is on leave following circumstances: (with or without pay1) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator or its designees made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall bear a reasonable rate of interest; (3) loans shall be adequately secured; (4) loans shall provide for periodic repayment over a reasonable period of time; and (5) loans shall not be made available to Highly Compensated Employees in their sole discretion. In no event shall an amount greater than the amount of the loan be less than $1,000, made available to other Participants and the amount of the loan, Beneficiaries.
(b) Loans made pursuant to this Section (when added to the aggregate amount outstanding balance of all other loans made by the Plan loans to the Participant then outstandingParticipant) may, may not exceed in accordance with a uniform and nondiscriminatory policy established by the Administrator, be limited to the lesser of:
(i1) $50,000, 50,000 reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan to the Participant during the one-one year period ending on the day before the date on which such loan was is made, over (B) the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made; , or
(ii2) one-half ( 1/2) of the Participant's vested Account Value on the date present value of the loannon-forfeitable accrued benefit of the Participant under the Plan. For purposes of this limit, all plans of the Employer shall be considered one plan.
(bc) Loans shall provide for level amortization with payments to be made to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less frequently than one (1) nor more than quarterly over a period not to exceed five (5) years. Loans made However, loans used to Participants for acquire any dwelling unit which, within a reasonable time, is to be used (determined at the purchase time the loan is made) as a “principal residence” of the Participant's Participant shall provide for periodic repayment over a reasonable period of time that may exceed five (5) years. For this purpose, a “principal residence residence” has the same meaning as a “principal residence” under Code Section 1034. Loan repayments may be suspended under this Plan as permitted under Code Section 414(u)(4).
(d) Any loans granted or renewed shall be for terms of made pursuant to a Participant loan program. Such loan program shall be established in writing and must include, but need not less than one be limited to, the following:
(1) nor more than thirty (30) years. Effective January 1, 1999, a the identity of the person or positions authorized to administer the Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two program;
(2) general purpose a procedure for applying for loans;
(3) the basis on which loans outstanding until will be approved or denied;
(4) limitations, if any, on the last types and amounts of loans offered;
(5) the procedure under the program for determining a reasonable rate of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to preserve Plan assets. Such Participant loan program shall be contained in a separate written document which, when properly executed, is hereby incorporated by reference and made a part of the Plan. Furthermore, such pre-January 1, 1999 general purpose loans has been paid offParticipant loan program may be modified or amended in writing from time to time without the necessity of amending this Section.
(ce) Any loan Notwithstanding anything in this Plan to the contrary, if a Participant hereunder or Beneficiary defaults on a loan made pursuant to this Section, then the loan default will be a distributable event to the extent permitted by the Code and Regulations.
(f) Notwithstanding anything in this Section to the contrary, any loans made prior to the date this amendment and restatement is adopted shall be considered an investment subject to the terms of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate plan in effect at the time the Plan Administratorsuch loan was made.
Appears in 1 contract
Samples: Employee Profit Sharing and Stock Ownership Plan and Trust Agreement (PBSJ Corp /Fl/)
Loans to Participants. (a) An Active If specified in the Adoption Agreement, the Trustee (or the Administrator if the Trustee is a nondiscretionary Trustee or if loans are treated as Participant receiving a regular paycheck from directed investments pursuant to the Employer may apply for one Adoption Agreement) may, in the Trustee's (or, if applicable, the Administrator's) sole discretion, make loans to Participants or more loans from Beneficiaries under the Plan. A Participant who is on leave following circumstances: (with or without pay1) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator or its designees made available to all Participants and Beneficiaries on a reasonably equivalent basis; (2) loans shall not be made available to Highly Compensated Employees in their sole discretion. In no event shall an amount greater than the amount made available to other Participants; (3) loans shall bear a reasonable rate of the interest; (4) loans shall be adequately secured; and (5) loans shall provide for periodic repayment over a reasonable period of time.
(b) Loans shall not be made to any Shareholder-Employee or Owner-Employee unless an exemption for such loan is obtained pursuant to Act Section 408 or such loan would otherwise not be less than $1,000, a prohibited transaction pursuant to Code Section 4975 and the amount of the loan, Act Section 408.
(c) Loans made pursuant to this Section (when added to the aggregate amount outstanding balance of all other loans made by the Plan loans to the Participant then outstandingParticipant) may, may not exceed in accordance with a uniform and nondiscriminatory policy established by the Administrator, be limited to the lesser of:
(i1) $50,000, 50,000 reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan to the Participant during the one-one year period ending on the day before the date on which such loan was is made, over (B) the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made; , or
(ii2) one-half (1/2) of the Participant's vested Account Value on the date present value of the loannon-forfeitable accrued benefit of the Participant under this Plan and all other plans of the Employer.
(bd) No Participant loan shall take into account the present value of such Participant's Qualified Voluntary Employee Contribution Account.
(e) Loans made to Participants for purposes other than for the purchase of the Participant's principal residence shall be required to provide for terms of level amortization with payments to be made not less frequently than one (1) nor more than quarterly, over a period not to exceed five (5) years. Loans made However, loans used to Participants for acquire any dwelling unit which, within a reasonable time, is to be used (determined at the purchase time the loan is made) as the "principal residence" of the Participant's principal residence Participant shall be provide for terms periodic repayment over a reasonable period of not less than one time that may exceed five (1) nor more than thirty (305) years. Effective January 1For this purpose, 1999, a Participant shall only be permitted to have outstanding one (1) "principal residence loan and one (1) general purpose loanresidence" has the same meaning as "principal residence" under Code Section 1034. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall loan repayments may be suspended under this Plan as permitted to have two (2under Code Section 414(u)(4) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid offfor qualified military service.
(cf) Any loan to a Participant hereunder shall be considered an investment An assignment or pledge of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the any portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which Plan and a loan, pledge, or assignment with respect to any insurance Contract purchased under the Plan, shall be treated as a loan under this Section.
(g) If the Vested interest of a Participant is used to secure any loan made pursuant to this Section, then the written (or such other form as permitted by the IRS) consent of the Participant's Accounts are invested pro rataspouse shall be required in a manner consistent with Section 6.5(a), provided the spousal consent requirements of such Section apply to the Plan. The loan shall bear interest for Such consent must be obtained within the 90-day period prior to the date the loan is made. Any security interest held by the Plan by reason of an outstanding based on a fixed monthly loan to the Participant or Former Participant shall be taken into account in determining the amount of the death benefit or Pre-Retirement Survivor Annuity. However, unless the loan program established pursuant to this Section provides otherwise, no spousal consent shall be required under this paragraph if the total Vested interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans subject to the security is not in accordance with Department excess of Labor Regulations Section 2550.408b-1. The interest rate $5,000 (or, $3,500 effective for loans under the Plan shall be equal made prior to the prime interest rate stated in The Wall Street Journal for later of the last working first day of the month preceding first Plan Year beginning after August 5, 1997, or the date specified in the Adoption Agreement).
(h) A Participant loan program shall be established which must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to administer the Participant loan plus 1%program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered, including what constitutes a hardship or financial need if selected in the Adoption Agreement;
(5) the procedure under the program for determining a reasonable rate of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to preserve Plan assets. The interest rate Such Participant loan program shall be contained in effect for a separate written document which, when properly executed, is hereby incorporated by reference and made a part of this Plan. Furthermore, such Participant loan program may be modified or amended in writing from time to time without the entire term necessity of amending this Section of the Plan.
(i) Notwithstanding anything in this Plan to the contrary, if a Participant or Beneficiary defaults on a loan made pursuant to this Section, then the loan default will be a distributable event to the rate extent permitted by the Code and Regulations.
(j) Notwithstanding anything in this Section to the contrary, if this is an amendment and restatement of an existing plan, any loans made prior to the date this amendment and restatement is adopted shall be subject to the terms of the plan in effect at the time such loan was made.
(k) For purposes of this Section, the Plan Administratorterm "Participant" shall mean any Employee as defined in Article I.
Appears in 1 contract
Loans to Participants. (a) An Active Participant receiving a regular paycheck from If specified in the Employer Adoption Agreement, the Administrator (or Trustee, if applicable) may apply for one authorize loans to Participants or more loans from Beneficiaries under the Plan. A Participant who is on leave following circumstances:
(with or without pay1) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved made available to all Participants on a reasonably equivalent basis;
(2) loans shall bear a reasonable rate of interest;
(3) loans shall be adequately secured;
(4) loans shall provide for periodic repayment over a reasonable period of time, as defined in subsection (d) below; and
(5) loans shall not be made for an amount less than the minimum loan amount stated in the Contracts.
(b) Loans shall be evidenced by the Plan Administrator or its designees in their sole discretion. In no event shall a legally enforceable agreement that specifies the amount and date of the loan and the repayment schedule. Such agreement must be less than $1,000either:
(1) in a written paper document or
(2) in an electronic medium under a system that is accessible to participants, and under which (i) only participants may make the amount loan request, (ii) participants are provided with an opportunity to review, confirm, modify or rescind their request, and (iii) the participant receives either a written or electronic confirmation of the loanrequest.
(c) Loans shall be permitted from all contribution sources, including rollovers.
(d) Loans made pursuant to this section (when added to the aggregate amount outstanding balance of all other loans made by the Plan loans to the Participant then outstanding, may not exceed Participant) shall be limited to the lesser of:
(i1) $50,000, 50,000 reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan to the Participant during the one-one year period ending on the day before the date on which such loan was is made, over (B) the outstanding balance of loans from the Plan to the Participant on the date on which such loan was made; , or
(ii2) the greater of (i) one-half (1/2) of the Participant's vested Account Value on the date present value of the loannon-forfeitable accrued benefit of the Employee under the Plan, or (ii) $10,000. For purposes of this limit, all plans of the Employer shall be considered one plan.
(be) Loans shall provide for level amortization with payments to be made to Participants for purposes other than for the purchase of the Participant's principal residence shall be for terms of not less frequently than one (1) nor more than quarterly over a period not to exceed five (5) years. Loans made However, loans used to Participants for the purchase of the Participant's principal residence shall acquire any dwelling unit which, within a reasonable time, is to be for terms of not less than one used (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off.
(c) Any loan to a Participant hereunder shall be considered an investment of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase Account, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject to the schedule in the preceding sentence, funds for a loan will be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect determined at the time the loan is made) as a principal residence of the Participant shall provide for periodic repayment over a reasonable period of time that may exceed five (5) years. Loan repayments must be suspended under this Plan Administratoras permitted under Code Section 414(u)(4).
(f) An assignment or pledge of any portion of a Participant’s interest in the Plan and a loan, pledge, or assignment with respect to any Contract purchased under the Plan, shall be treated as a loan under this Section.
(g) Notwithstanding anything in this Plan to the contrary, if a Participant or Beneficiary defaults on a loan made pursuant to this section that is secured by the Participant’s interest in the Plan, then a Participant’s interest may be offset by the amount subject to the security to the extent there is a distributable event permitted by the Code or Regulations.
(h) A Participant loan program shall be established which must include, but need not be limited to, the following:
(1) the identity of the person or positions authorized to administer the Participant loan program;
(2) a procedure for applying for loans;
(3) the basis on which loans will be approved or denied;
(4) limitations, if any, on the types and amounts of loans offered, including what constitutes a hardship or financial need if selected in the Adoption Agreement;
(5) the procedure under the program for determining a reasonable rate of interest;
(6) the types of collateral which may secure a Participant loan; and
(7) the events constituting default and the steps that will be taken to preserve Plan assets.
(i) Such Participant loan program shall be contained in a separate written document. Furthermore, such Participant loan program may be modified or amended in writing from time to time without the necessity of amending this Section. In the event of any conflict between the terms of this Plan and a separate loan program, the terms of the Plan will control.
Appears in 1 contract
Loans to Participants. (a) An Active Participant receiving The Benefit Funds Committee is authorized to establish a regular paycheck from the Employer may apply for one or more loans from the Plan. A Participant who is on leave (with or without pay) or who is receiving long-term disability benefits or severance pay, as well as retirees, temporary employees loan program under this Plan and beneficiaries, may not apply for a loan. Subject to limitations described herein, loans shall be approved by the Plan Administrator or its designees in their sole discretiondelegate shall administer a program and shall establish and modify related rules and procedures. In no event Such loans shall be available to all Participants hereunder on a reasonably equivalent basis, shall be adequately secured and shall bear a reasonable rate of interest. Loans shall originate so as to not be a taxable distribution, by qualifying for the exception under code section 72(p). The Benefit Funds Committee shall direct the Trustee to make a loan from the trust fund to a Participant subject to the following:
(a) The principal amount of the any loan be less than $1,000, and the amount of the loanmade to a Participant, when added to the aggregate amount outstanding balance of all Plan other loans made to the Participant then outstandingfrom all qualified plans maintained by the Employers, may shall not exceed the lesser of:
(i) $50,000, reduced by the excess (if any) of (A) the highest outstanding balance of loans from the Plan during the one-year period ending on the day before immediately preceding the date on which such loan was madeof the loan, over (B) the outstanding balance of loans from the Plan on the date on which of the loan, of all such loan was made; loans from all such plans, or
(ii) one-half of the Participant's ’s vested Account Value on under the date plan.
(b) Each loan must be evidenced by a written note in a form approved by the Plan Administrator, shall bear interest at a reasonable rate, and shall require substantially level amortization (with payments at least quarterly) over the term of the loan.
(bc) Loans made to Participants for purposes other than for the purchase of the Participant's principal residence Each loan shall be for terms of specify a repayment period that shall not less than one (1) nor more than extend beyond five (5) years. Loans made to Participants for the purchase of the Participant's principal residence shall be for terms of not less than one (1) nor more than thirty (30) years. Effective January 1, 1999, a Participant shall only be permitted to have outstanding one (1) principal residence loan and one (1) general purpose loan. Notwithstanding the foregoing, a Participant who had one or more general purpose loans outstanding on December 31, 1998 shall be permitted to have two (2) general purpose loans outstanding until the last of such pre-January 1, 1999 general purpose loans has been paid off.
(c) Any loan to a Participant hereunder shall be considered an investment of the Participant's Account, and loan funds will be drawn from the following portions of the Participant's total Account in the following order: Money Purchase AccountHowever, the portion of the Participant's Post-1986 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1986 Incentive Contribution Account, Post-1983 Deferral Account, Post-1986 Deferral Account attributable five year limit shall not apply to Unmatched Deferral Contributions, remaining Post-1986 Deferral Account, Pre-1984 Incentive Contribution Account, the portion of the Participant's Pre-1987 Incentive Contribution Account automatically invested in the Stock Account as provided under Section 5.3, the remaining Post-1987 Incentive Contribution Account, Voluntary Contribution Account, and Rollover Account. Subject any loan used to the schedule in the preceding sentence, funds for acquire any dwelling unit which within a loan will reasonable time is to be obtained by liquidating the Participant's interest in the various Investment Funds in which the Participant's Accounts are invested pro rata. The loan shall bear interest for the period the loan is outstanding based on a fixed monthly interest rate that reflects a reasonably competitive interest rate that would be charged for similar collateralized loans in accordance with Department of Labor Regulations Section 2550.408b-1. The interest rate for loans under the Plan shall be equal to the prime interest rate stated in The Wall Street Journal for the last working day of the month preceding the date of the loan plus 1%. The interest rate in effect for the entire term of the loan will be the rate in effect used (determined at the time the loan is made) as the principal residence of the Participant. Any loan made under the Plan Administratoron or before December 31, 1986 shall be governed by the terms of the Plan in effect on or before that date. Any loan made under the Plan after December 31, 1986 (including any renegotiation, extension, revision or renewal after that date of a loan made on or before that date) shall be subject to the foregoing limitations of this subsection. If a Participant’s employment terminates and any loan or portion of a loan made to him, together with accrued interest thereon, remains unpaid, an amount equal to such loan or any part thereof, together with accrued interest thereon, shall be charged to the Participant’s Account after all other adjustments required under the Plan, but before any distributions pursuant to subsection 7.1 hereof. In determining the net worth of an investment fund as of an accounting date, the Benefit Funds Committee shall disregard both (i) any notes held by the Trustee which evidences loans made to Participants under this subsection 7.5, and (ii) any interest and principal payments on such loans received by the Trustee since the last preceding accounting date. For purposes of adjusting a Participant’s Accounts under subsection 11.4 hereof, the Plan Administrator shall exclude from the credit balance in a Participant’s Account the unpaid amount of any loan made to him (disregarding any principal payments made since the last preceding accounting date). Interest paid by a Participant on a loan made to him under this subsection 7.5 shall be credited to the accounts of such Participant as of the accounting date which ends the accounting period of the Plan during which such interest payment was made, after all other adjustments required under the Plan as of that date have been completed. Loan repayment will be suspended under the Plan as permitted under Code Section 414(u).
Appears in 1 contract
