Loans
The Annuity Plan allows you to borrow money from your Annuity account under some circumstances. If you wish to take a loan , you will need to log into your account at Empower's website. You may also call Empower for assistance at 833-569-2433.
Loan Types
There are two types of loans offered:
- Personal Loans, with a term of less than five years, and
- Home loans for the purchase of a primary residence, with a term between 5 and 30 years.
Loan Limitations
- The minimum loan is $1,000.
- The maximum loan is $50,000 (reduced by the highest amount owed on any outstanding Plan loans over the preceding 12 months) or, if less, a loan amount which would bring your total outstanding loans to a maximum of 50% of the value of your Annuity account.
- No more than three loans may be outstanding at any time. You may not take a third loan if you have defaulted on either your 1st or 2nd loan.
- You may refinance any of your loans for the purpose of reducing the interest rate you are paying on a loan.. You may not refinance the amount or term of an existing loan.
- If you are married, you must receive your spouse’s written consent to take a loan.
Loan Repayment
- Loans are repaid through direct deductions from your bank account.
- Interest is charged at the prime rate quoted in the Wall Street Journal on the date your loan application or refinancing is processed.
- Loans may be prepaid in full at any time without penalty.
Defaulted Loans
A loan is “in default” when:
- a payment is missed, or
- after taking a distribution, the account balance is less than the total balance of all outstanding loans.
If you default on a loan, the total balance is subject to Federal income tax. In this case, you will receive a Form 1099-R the following January reporting the amount of the taxable income. If you are under age 59 1/2, you will also have to pay a 10% excise tax.
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