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Loans from NYSA/ILA Money Purchase Pension Plan

Wed, 08/05/2009 - 11:35am — carlbiers

Members will soon be able to apply for loans against your NYSA-ILA annuity (Money Purchase Plan) under certain circumstances. The plan, which has yet to be finalized and formally announced, was discussed at NY/NJ District Council meeting in June. Below are the tentative details released in a draft of a letter to ILA members that will be sent when the terms and start date are finalized:

Loans will be available for the following reasons:

  • Purchase of a primary residence
  • Unreimbursed medical expenses
  • To prevent eviction or foreclosure on your primary residence
  • Post-secondary education expenses
  • Repair of damage to primary residence (must qualify for the casualty deduction for federal income tax purposes)
  • Funeral expenses for deceased parent, spouse, or child or other dependent
  • Expenses for education of a child or dependent to attend a school or institution for physically or mentally disabled children

    Loan details

  • Application fee $75
  • Interest rate Prime + 1%
  • Minimum $4,000
  • Maximum 50% of your vested account balance (no more than $50,000)
  • Length: up to five years, 15 years for primary residence
  • Number of loans you may have at one time 1 at any time

    Loan proceeds are disbursed from your account and your account balance will be reduced at the time of loan initiation. Loans are not treated as a taxable distribution or subject to federal taxes or penalties unless IRS rules are violated or the loan is in default. You will be considered in default of the loan if Prudential does not receive your scheduled payment within 90 days of the due date.