Loans Review

Question 1

In general , what is the MAXIMUM loan amount the IRS permits a PPT to take/have outstanding across all their plans ?

Answer 1

Max allowed across all plans is 50k
The max amount a PPT can take is THE LESSER OF : 50% of the sum of the vested account balance minus outstanding principle , or 50k reduced by highest outstanding loan balance in the preceding 12 months

Question 2

what is the max time that can be used to pay back a personal loan ?

Answer 2

5 years

Question 3

What is the max time that can be used to pay back a home loan ?

Answer 3

Differs by plan. Check System. The IRS max is 30 years.

Question 4

What are the two types of personal loans a plan can choose from ?

Answer 4

Any reason , safe harbor hardship

Question 5

How to look up number of loans in P3

Answer 5

Transactions> Loans > Plan loan provisions

Question 6

Where would you find the interest rate a PPT will pay on a loan?

Answer 6

Transactions> Loans> Plan loan provisions based on loan type.

Question 7

Where in P3/CTI can you see how does this PPT pay back a loan ?

Answer 7

1. Transactions> Loans> Plan loan provisions.
   2.Transaction>Loans>Loan Modeling.

Question 8

Where can you find the duration for a home loan ? Personal Loan?

Answer 8

Transactions> Loans> Plan loan provisions Based on loan type.

Question 9

What approvals are needed for a personal loan ?

Answer 9

Spousal Consent, vesting, Marital Status and other needs to be approved by TRS
Transactions> Loans> Authorization and Approval

Question 10

Where would you go to find how much a PPT has available for a loan that day?

Answer 10

Transactions> loans > loan Modeling

Question 11

where can you find the highest outstanding loan balance in the last 12 months?

Answer 11

Transactions> loans > loan Modeling

Question 12

How can you tell if a plan allows PPT to borrow from all sources ?

Answer 12

Transactions >Loans> Plan Source and loan provisions> Loan Source and fund provisions link Number ( Unclaimed benefits, Qualified ER Non-Elective)

Question 13

How can you tell if a PPT can apply for a loan on the ppt website

Answer 13

Transactions> loans/Authorization and Approval

Question 14

Where can you find the loan maintenance fee ?

Answer 14

Transaction >loans> Plan loan provisions

Question 15

Where would you go to find if a PPT has any unprocessed Transactions?

Answer 15

Transaction> loans > participant loan activity > other pending transaction

Question 16

What must a PPT supply for a home loan ?

Answer 16

Supporting documentation showing purchase of primary residence, amount, and closing date with buyer and seller signature

Question 17

What do the following mean on the loans page of P3/CTI?
Model Only:
Model and Initiate:
Not allowed

Answer 17

Model Only: Go over loan provisions, model the loan, and send a loan form
Model and Initiate: Go over loan provisions, model the loan, and initiate the loan
Not allowed: Go over loan provisions, and send a form

Question 18

What is the only way an ACH loan can be initiated?

Answer 18

The plan allows for ACH - this must be done on the ppt website by the ppt

Question 19

What are two plan repayment options for loans?

Answer 19

Coupon or payroll deduction

Question 20

What is the rule when a PPT wants to make payments on multiple coupon loans?

Answer 20

Separate check for each coupon, loan number on each check

Question 21

True or False? A ppt can pay a loan off at anytime (the repayment method does not matter)

Answer 21

True

Question 22

How long is the loan payoff quote good for?

Answer 22

10 calendar days

Question 23

True or false? TRS encourages ppt to send a personal check for a loan payoff.

Answer 23

False- We do not accept personal checks

Question 24

What else should the ppt send us besides the funds when sending a loan payoff?

Answer 24

Loan payoff instructions

Question 25

How long does it take for the loan payoff to post to their account?

Answer 25

4 business days from the date of receipt, 2-3 business days if paid online

Question 26

What must they include on their loan payoff check to make sure it's applied to their account properly?

Answer 26

Loan number

Question 27

What is the longest repayment frequency for loan repayments?

Answer 27

Quarterly (Knowledge DC loan repayments and payoff overview)

Question 28

What is a takeover loan? How is it represented in the system?

Answer 28

A loan that was initiated at another carrier prior to the plan moving to TRS. Red check mark on loan history.

Question 29

How can participants obtain loan payoff instructions?

Answer 29

CC can fax or email, or participant can print from website, not mail.

Question 30

How will an overpayment of a loan payoff be applied if: a) the payment comes from ER b) the payment comes from the PPT

Answer 30

a) If payment comes from ER, It would be applied to any other outstanding loans. If there aren't any, it would be refunded to the PPT b) If payment comes from PPT, It would be refunded to the PPT regardless if the PPT has another outstanding loan

Question 31

What is the rule regarding defaulted coupon loans?

Answer 31

If a PPT ever defaults on a coupon loan, they will not be entitled to future coupon loans unless they have paid off the defaulted coupon loan OR the plan changes to payroll deduction loans.

Question 32

A defaulted loan would be a ______ event for the PPT and they would receive a 1099R at tax time.

Answer 32

taxable

Question 33

True or False? A PPT will also receive a 1099R when a loan is issued to them?

Answer 33

False

Question 34

True or False? An offset loan will always show as an outstanding loan on a PPT's account

Answer 34

False

Question 35

True or False? A deemed loan will always show as an outstanding loan on a PPT's account?

Answer 35

True

Question 36

True or False? A deemed loan will reduce the amount available for future loans.

Answer 36

True

Question 37

True or False? If the plan allows for more than one loan, and a PPT has defaulted on a payroll loan, they will be able to take another loan if they have the funds available.

Answer 37

True because it is payroll deduction

Question 38

True or False? If the plan allows for more than one loan, and the PPT has defaulted on a coupon loan, they will be able to take out anot/her loan if they have the funds available?

Answer 38

False unless the plan allows payroll deduction repayments and the plan has more than one loan available, or the PPT has paid their defaulted loan off in full.

Question 39

If a PPT has defaulted on a payroll or coupon loan that is preventing them from taking a new loan, what could they do that would allow them to take a loan again?

Answer 39

Pay off the defaulted loan in full.

Question 40

What is the tax implication of a defaulted loan?

Answer 40

Outstanding loan balance becomes taxable to the PPT in the year it defaulted. They may have to pay a 10% penalty if under the age of 59 1/2.

Question 41

What are the two implications of a deemed loan on a PPT's account?

Answer 41

1. Reduces the amount available for future loans 2. Reduces number of loans available

Question 42

When will a loan default?

Answer 42

The end of the quarter after the quarter in which the payment is due. (IRS period) The actual date in our system will be the 21st of the month following the end of the quarter, but we do not quote that date.

Question 43

How do you find the loan issue date on a loan?

Answer 43

Transactions -> Loans/ history

Question 44

Where in P3/ CTI can you view or order an additional amortization schedule for the PPT for the loan?

Answer 44

Transactions -> Loans -> History -> Request duplicate forms

Question 45

What would you tell the participant if they wanted to pay off their loan by mailing in a payment?

Answer 45

Payoff amount, amount good for 10 calendar days, see if can do on PPT website, bill pay, money order, or certified check. Where to send payment, takes up to 4 business days once check is received by the bank to be posted to the account, loan number on payment, include loan pay off instructions.