MMC Benefits Handbook
Repaying Loan When Not Working
While on Vacation/Paid Leave of Absence
Loan repayments will continue to be taken from your paycheck while you are on vacation/paid leave of absence.
While on Unpaid Leave of Absence
While you are on an unpaid leave of absence, you have to make loan repayments. You can continue to make loan repayments by:
  • certified check.
  • money order.
  • direct debit from checking or savings account.
If you do not make loan repayments as scheduled or otherwise are in Default, your outstanding loan balance will be deemed a distribution, your Vested account balance will be reduced by the amount of the outstanding loan as soon as permitted under the tax laws, and you will owe Federal income taxes on the unpaid balance of your loan (including interest) plus an additional 10% Federal early withdrawal tax if you are under age 59-1/2 and no IRS exception applies to you.
While on Military Leave of Absence
While you are on a military leave of absence, you can continue to make loan repayments by:
  • certified check.
  • money order.
  • direct debit from checking or savings account.
Alternatively, you can suspend payments for the duration of your leave. If you suspend payments, interest continues to accrue during the leave. A maximum interest rate cap imposed under Federal law could apply if you are on a military leave of absence.
While on Long Term Disability
While you are on long term disability, you have to make loan repayments if you retain a Plan balance. You can make monthly loan repayments by certified check, money order or via direct debit from a checking or savings account. If you don't make loan payments as scheduled or repay the entire loan within 90 days of qualifying for long term disability, your outstanding loan balance will be a deemed distribution, your vested account balance will be reduced by the amount of the outstanding loan as soon as permitted under the tax laws, and you will owe Federal income taxes on the unpaid balance of your loan (including interest) plus an additional 10% Federal early withdrawal tax if you are under age 59-1/2 and no IRS exception applies to you. There is a disability exception which may apply. You may want to consult with a tax professional.
When You Leave the Company
If you terminate employment with the Company and all affiliated employers, including by Retirement, you are eligible for a final distribution or you may elect to leave your balance in the Plan. Either way, you must repay the outstanding loan balance by single certified check or money order within 90 days of your termination (including retirement) date.
If you leave your balance in the Plan and do not repay the loan within 90 days of your termination date, your outstanding loan balance will be treated as a distribution, your vested account balance will be reduced by the amount of the outstanding loan, and you will incur Federal taxes on the unpaid balance of your loan (including interest) plus an additional 10% Federal early withdrawal tax if you are under age 59-1/2 unless an IRS exception applies to you.
If you request a final distribution of your account, Federal tax will be withheld based on the unpaid balance of your loan unless you repay the loan within 90 days of your termination and elect a direct rollover.
If you would like to pay off your outstanding loan, call the Employee Service Center at +1 866 374 2662 for the pay off amount.
When You Die
If you die with an outstanding loan, the loan is immediately due and payable. Your Beneficiary must repay the outstanding balance in full within 90 days from your date of death. If there are multiple beneficiaries, each beneficiary will be responsible for his or her share of the outstanding loan. If the beneficiary fails to repay the loan, the outstanding loan balance will reduce the distribution otherwise payable from the Plan. Beneficiaries should consult with a tax professional about their individual situations.