Retirement Plan Participants’ Loan Interest Rates

November 14, 2012 at 10:02 pm Leave a comment

Does your retirement plan charge a reasonable rate of interest?   The IRS has a resource they added to their website regarding reasonable rates of interest for plan participants.  Located at http://www.irs.gov/Retirement-Plans/Retirement-News-for-Employers—Winter-2012—Participant-Loans-–-What-is-a-Reasonable-Interest-Rate%3F, the article provides some nice examples.  The IRS cites that the DOL issues a two question test.  The first is to look at what rate financial institutions are currently charging borrowers posting similar collateral and of comparable credit risk.  The second is then to check local interest rates.

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Christine Gurney

A pension professional who shares her thoughts and ideas about the pension world for industry members and anyone else interested.

@ChristineGurney

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