Hardship and General Purpose Loans

Loan Eligibility

  • Active and retired participants: Only active and retired participants are eligible for loans. Loans are not available to alternate payees or beneficiaries.
  • Outstanding loans: You may have more than one loan outstanding, but you cannot receive more loans if you are in default on any loan.

The minimum amount of a loan is $1,000.

Hardship Loan: All hardship loans from the Money Purchase Plan (based on contributions made on your behalf before February 1, 2010) cannot collectively exceed the lessor of:

  • 50% of the vested balance in your account; or
  • $50,000

Each loan is up to the amount you need for an immediate and heavy financial need due to:

  • Medical care expenses (incurred or necessary in the future) for you or your dependent, including expenses for the diagnosis, cure, mitigation, treatment or prevention of disease, as well as for transportation primarily for and essential to this medical care.
  • Tuition and related educational fees for the next 12 months of post-secondary education for you or your dependents. Related educational fees include fees, books, equipment required for and courses of instruction, and room and board.
  • Down payment and other costs directly related to the purchase of your primary residence (excluding mortgage payments).
  • Payments to prevent your eviction from your principal residence or foreclosure on the mortgage of your principal residence

General Purpose Loan: All general purpose loans from the Profit Sharing Account and Money Purchase Account cannot collectively exceed the lessor of:

  • 50% of the vested balance in your account; or
  • $10,000

You can request one General Purpose Loan during any 12 consecutive months.

Loan Fees

  • $35 loan setup fee per loan plus $3.75 quarter administration fee for each loan.

Interest Rate

  • The interest rate of a loan is determined at the time the loan is issued and will remain fixed throughout the life of the loan. The current interest rate is fixed by the Trustees and will be changed periodically so that it is approximately 1% over the prime interest rate being charged by a local financial institution designated by the Trustees. The Trustees reserve the right, in their discretion, to modify the interest rate at any time.

Repayment Period

  • The maximum repayment period is five years; however, you may repay the loan faster without any penalty. Your Plan loans are repaid by ACH debits from your bank account.

Missed Payments

If you fail to make timely payments, and if it remains uncorrected on the last day of the calendar quarter following the calendar quarter in which the failure occurred (cure period), the loan is considered in default. The Loan Administrator will send you a notice to correct the default within the cure period. If you don’t, the Plan will foreclose on your benefits that secures the loan as follows:

  • If, at the end of the cure period, you are entitled to a distribution from the Plan because of termination of employment, the unpaid balance of principal and interest of the delinquent loan will be offset against your benefits and constitute a distribution.
  • If, at the end of the cure period, you have not incurred a distribution event, then the offset procedure set forth above will not be instituted and no further action will be taken until you terminate employment, die or have any other distributable event under the Plan. At that time, your accounts will be offset and foreclosure of the loan deemed completed.
  • If your loan is not repaid in accordance with its terms and it is not possible to foreclose on the security as described above, then your loan will be considered a distribution. Immediately following the end of the cure period, the outstanding balance of the loan will become taxable as if it had been distributed and a Form 1099-R will be issued to you.

Termination of Employment

  • If you terminate employment, you may continue to repay the loan. However, if you elect to receive a distribution of your account, then the loan will be in default and must be repaid in full prior to distribution of your account and the loan, including interest will be offset against the distribution.


John receives his account balance in one lump sum when his employment ends:

  • John’s account balance is $100,000, plus
  • His outstanding loan amount of $20,000, equals
  • Total distribution of $120,000

John receives a final distribution of $76,000, based on a total distribution of $120,000 less 20% for federal taxes ($24,000), less the loan payoff of $20,000.
John’s 1099-R shows a $120,000 taxable distribution although the final distribution is $76,000. If John is under age 59½, he will pay an additional 10% penalty for the distribution. See the section, Concerning Taxes, for additional information.