Your employer has the option of allowing participant loans in your retirement plan. If your employer has chosen to allow participant loans, the maximum amount of your participant loan will be limited to 50 percent of your vested account balance. The maximum aggregate dollar amount of loans outstanding to any participant may not exceed $50,000, reduced by the excess of the Participant’s highest outstanding Participant loan balance during the 12-month period ending on the date of the loan.

The amortization of a participant loan may not extend beyond five years, unless the loan is for the purchase of your principal residence. Loan payments are usually made by payroll deduction.

Additionally, your employer may limit the number of loans you have outstanding, apply a minimum loan amount, and may charge you for a loan initiation fee and annual loan administration fees.

The Plan Administrator will treat a loan in default if any scheduled payment remains unpaid beyond the last day of any calendar quarter following the calendar quarter in which the Participant missed the scheduled payment. If a participant loan is defaulted, the participant will receive a Form 1099R for the remaining balance, and will be assessed the 10 percent early withdrawal penalty if the participant has not attained age 59-1/2.

To obtain a participant loan, contact your HR department or the person in charge of your 401(k) Plan.