Eligibility - To be eligible for a TDA loan:

• You must have been a TDA participant for 1 year, and;
• Your current status must be active, on leave or you are a retired member with a TDA deferral  participation code, and;
• You are not in default on an existing QPP or TDA loan, and;
• You have not taken a TDA loan during the last twelve months.

Note - You may have only one outstanding loan at a time. If you have a balance from a previous loan when you apply for a new loan, your new loan will include an amount necessary to pay off the previous loan.

Minimum Loan Amount - The minimum TDA loan amount is $1,000. If you have an existing TDA loan outstanding, you can request a minimum loan of $250, provided the sum of your outstanding loan balance and new loan totals $1,000.

Maximum Loan Amount - If you are a Tier 1 or 2 member with 5 or more years of credited service or at least age 55, or a Tier 3/4 member with 5 or more years of credited service, your maximum available loan is the lesser of (a) and (b) below. If you are a Tier 1 or 2 member with less than 5 years of credited service and you are not at least age 55, or a Tier 3/4 member with less than 5 years of credited service, your maximum available loan is the least of (a), (b) and (c) below.
The maximum available loan is the lesser of:

1. $50,000 less your highest combined QPP, TDA and 55/25 or 57/5 outstanding loan balance during the one year period immediately preceding the date of the new loan.
2. 75% of the full value of your TDA account less your current outstanding TDA loan balance.
3. The greater of (1) 50% of your combined ASF/MCAF, TDA and 55/25 or 57/5 accounts (unreduced by any outstanding loan balance); or (2) $10,000 less your current combined outstanding loan balance.
   

Note- When your loan is processed, your TDA accounts will be automatically debited based on your fixed and variable account balances (and any transfers in process), at the time of the loan.

Interest - The interest rate for all TDA loans is 8.25%.

Insurance - Your loan will be fully insured against your death 30 days after the date of the loan check. Before that date there is no insurance coverage. Insurance premiums will be included in your regular loan repayments for as long as you maintain an outstanding loan balance, at a rate of 0.4%. If your loan goes into default status, it is no longer insured and no premium will be charged. Any unpaid insurance incurred between the time of your last loan payment and your default, will be debited against your account once the loan is liquidated.

Duration - The maximum repayment period for all TDA loans is 60 months.

Repayments - Repayments for TDA loans are generally made through payroll deductions. If you are not receiving paychecks (i.e. you are on leave of absence, vested or TDA deferral), you must make monthly repayments directly to BERS.
A lump sum payment option to pay off an outstanding loan balance is available. To make a lump sum payment, contact BERS to request a lump sum payment amount, and the payment due date. Partial payments over your minimum repayment are allowed, and will result in a $40 fee to recalculate a new loan repayment.

Note - Repayments will be credited to your account according to your TDA variable annuity election at the time the payment is processed.

Service Charge - There is a $40 non-refundable service charge to process a loan. This charge is used to pay for the operation of the TDA loan program. The service charge will be considered an additional loan amount when calculating the terms of the loan (repayment and duration). If you are eligible for, and you request a $50,000 loan, you will receive a check for $49,960 to avoid exceeding the $50,000 loan maximum when the $40 service charge is added to the loan. If you are eligible for, and you request a $10,000 loan, you will receive a check for $10,000. Repayments will be calculated on $10,040 (the $40 service charge plus the loan amount).

Defaults - Your loan will be considered in default if no payments are received within any 90 day period. BERS will issue you a 1099R for the amount of the outstanding loan. In addition, if you are over age 59½ or have pre-1989 TDA funds available for withdrawal, BERS will foreclose on these funds to liquidate the TDA loan. Any loan that can not be liquidated will be maintained by BERS until it can be liquidated. A 1099R will be produced yearly to report additional loan interest charged to your defaulted outstanding TDA loan. Any loan in default is no longer insured.

Retirement - If you retire and become a TDA Deferral with an outstanding loan balance you must continue to make monthly loan repayments directly to BERS. If no payments are received in any 90 day period the outstanding loan balance will be in default and considered a distribution. The distribution will result in a 1099R that will also be reported to the Internal Revenue Service. There may be tax consequences associated with this distribution.

Resignation/Termination - If you resign or are terminated and are not vested in the QPP, you must make a lump sum payment within 90 days, to BERS, or the outstanding loan amount will be considered a distribution. The distribution will result in a 1099R that will be reported to the Internal Revenue Service. There may be tax consequences associated with this distribution.

Transfers - If you transfer to another public employee retirement system, your outstanding loan will also be transferred, provided the new retirement system is willing to accept the outstanding loan. If the new retirement system cannot accept the outstanding loan, you must make a lump sum payment within 90 days to BERS. Otherwise the outstanding loan will be considered a distribution, and a 1099R will be issued for the outstanding loan that will also be reported to the Internal Revenue Service. There may be tax consequences associated with this distribution.

Death - Any outstanding loan balance at the time of your death will be considered a distribution to the member, resulting in a 1099R that will also be reported to the Internal Revenue Service.