Defined Contribution Plan Document
ARTICLE X
PARTICIPANT LOANS
Section 1. Loans to Participants.
- The Plan Administrator shall make loans to Participants under the
following circumstances:
- Loans shall be made available to all Participants and Beneficiaries
on a reasonably equivalent basis;
- Loans shall be made for the following purposes only:
- Unreimbursed medical, dental or legal expenses incurred by
the Participant or be a member of the Participant's
immediate family;
- Acquisition of Participant's primary residence;
- Home improvement loan on Participant's primary residence;
- Prevention of foreclosure on Participant's primary
residence;
- Automobile loan for Participant or a member of the
Participant's immediate family;
- Payment of books, tuition and related education expenses of
Participant or a member of Participant's immediately
family; or
-
For loan applications received by NYLIM on or after May
1, 2009, loans may be made
for purposes of debt consolidation by the Participant and/or
the Participant's Spouse.
- Loans shall not be made available to Highly Compensated
Employees in an amount greater than the amount made available to
other Participants.
- Loans shall not be granted to any Participant that provide for a repayment
period extending beyond such Participant's Normal Retirement Date.
- The minimum loan amount which shall be made pursuant to this Section
is $1,000.00.
- The interest rate charged on loans made pursuant to this Section shall be
the prime rate plus one percentage point. The interest rate shall be fixed
at the inception of the loan and remain constant thereafter.
- Loans made pursuant to this Section shall be limited to the lesser of:
- $50,000.00; or
- One-half (½) of the present value of the non-forfeitable accrued
benefit of the Participant's Account under the Plan.
- Loans shall provide for level amortization with payments to be made not
less frequently than quarterly over a period not to exceed five (5) years.
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 shall provide for periodic
repayment over a reasonable period of time that may exceed five (5)
years.
- Any loans granted or renewed on or after the last day of the first Plan
year beginning January 1, 1998, 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:
- The identity of the person or persons authorized to administer the
Participant loan program;
- A procedure for applying for loans;
- The events constituting default and the steps that will be taken to
preserve Plan assets.
- An outstanding or defaulted loan will be required to be repaid in full
upon retirement or at the time a full distribution of an Individual Account
is made under Article VI of the Plan. Repayment shall occur in the form
of a reduction in the amount of the distribution by the amount of the
outstanding or defaulted loan balance.
- A Participant may have only one loan outstanding at any time.
- A Participant's income shall not include interest that accrues on a Plan
loan after a deemed distribution is made under the provisions of the
Internal Revenue Regulations.
- The Plan Administrator may allow a limited grace period to repay unpaid
installments. The Plan Administrator has adopted the last day of the
calendar quarter following the calendar quarter in which the loan
installment payment was due as the grace period. Therefore, if a
Participant fails to make an installment payment when due under the
terms of the loan, the Participant shall have until the last day of the
calendar quarter following the calendar quarter in which the loan
installment payment was due to make the installment payment. If the
Participant fails to make the installment payment before the last day of
the calendar quarter following the calendar quarter in which the loan
installment payment was due, then the loan shall be deemed to be in
default. In the event a loan is deemed to be in default, then there is a
deemed distribution of the entire outstanding balance of the loan as of the
date of the default.
- Effective for any loan application received by the Plan Administrator on
or after April 1, 2008, if a Participant has defaulted on a prior loan and
received a deemed distribution of said loan under the Plan, the Participant
will not be eligible for a subsequent loan until the prior outstanding loan
has been repaid in full, including accrued interest.
- In accordance with Section 414(u)(4) of the Code, payments on a loan
will be suspended for any part of a period during which the Participant is
performing service in the uniformed services, whether or not such service
is qualified military service. Such suspension shall not cause the loan to
be deemed distributed even if the suspension exceeds one year and even
if the term of the loan is extended. However, upon the Participant's
completion of such period of military service, loan repayments shall
resume and the loan shall be repaid thereafter by amortization in
substantially level installments over a period that ends not later than the
latest permissible term of the loan. The latest permissible term of the
loan means the date that the last payment of the original loan is due plus
any additional period of suspension permitted due to the performance of
service in the uniformed services by the Participant.
- All loans administered under this Plan shall comply with the following
requirements:
- No more than ninety (90) days before the date of the
loan, the Participant and the Participant's spouse, if any,
shall file a written consent to the loan and to the possible
forfeiture of benefits, responsibility for the tax liability
therefore in the event of a default and acknowledging the
potential impact on their benefits, in the form prescribed by
the Board of Trustees and witnessed by a notary public, or
Spousal consent to a loan under this Plan shall continue to
remain in full force and effect regardless of any change in
the Participant's marital status after the date of the loan.
- No more than ninety (90) days before the date of the
loan, the Participant shall file a statement, on the prescribed
form and witnessed by a notary public, acknowledging the
possible forfeiture of benefits, responsibility for the tax
liability therefore in the event of a default and representing
that he or she is (and by the date of the loan will continue to
be):
- Not married, or
- Unable to locate his or her Spouse and provides
supporting documentation as required by the Plan
Administrator.
In no event shall the Plan permit a loan to be made under
Paragraph 2(B) of this Section if the Spouse has previously
joined the Plan in a dissolution proceeding, served a notice
of adverse interest on the Plan or served the Plan with
another claim or Court order relating to the benefits accrued
by the Participant under the Plan.