V TA
401(a) Money Purchase Plan
Loan/Refinance Application Packet
This booklet contains the 401(a) Loan/Refinance
Form
two
VTA has chosen to make loans available from your section 401(a) money purchase plan, administered by the ICMA Retirement Corpora-
tion (ICMA-RC). The loan provision is a valuable feature, giving you the opportunity to borrow from your account balance and repay the
loan through Automated Clearing House (ACH) debit. The loan is actually an investment of a portion of your account balance in a
promissory note which you will sign upon receiving the loan funds. All loans bear interest that you pay and is credited to your account. The
amount you receive as a loan is not treated as a taxable plan distribution unless you default on the loan.
Steps to Follow
1. Obtain Loan Guidelines from VTA.
The Loan Guidelines contain the specific provisions adopted by VTA relating to permissible loans, such as:
Eligibility. Loans are available to active employees who are in paid status at the time of the loan application. If, at the time
of the loan application you are in a paid status (i.e., vacation, sick leave), but are not actively working, you must indicate
your intention of returning to active work with VTA in order to be eligible. If you are actively working, you must indicate
your intention to continue working at VTA. Loans are available for the following reasons only:
(1) Purchase of a participant’s principal place of residence. (Loans are not available for refinancing or foreclosure.)
(2) College Tuition and Fees (Excludes books and living costs.)
(3) Unreimbursed medical expenses.
Loan Frequency. One loan per calendar year is permitted, provided all previous loans have been repaid in full.
Loan Amount. The minimum permitted loan amount is $1,000, and you must have at least $2,000 in your account at
the time. The maximum may not exceed the lesser of 50% of your account balance or $50,000. A worksheet for calculat-
ing this amount is included on the last page of this brochure.
Length of Loan. Loans must