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The summary plan description provides for discretionary
loans made from the Plan to participants and beneficiaries.1
According to section VIII of the summary plan description, a
participant had to apply for a loan on forms provided by the Plan
administrator. The Plan administrator would then decide whether
a participant qualified for the loan and inform the trustee of
this decision. The trustee would review the administrator's
decision and make an independent decision on whether to approve
the loan. Also, according to the summary plan description, Plan
loan requirements included the following: (1) Loans must be made
available to all participants and their beneficiaries on a
uniform and nondiscriminatory basis; (2) loans must be adequately
secured, with up to one-half of a participant's vested account
balance as security for the loan; (3) loans must bear a
reasonable rate of interest; (4) loans must have a definite
repayment period which provides for payments to be made not less
frequently than quarterly, and for the loan to be amortized on a
level basis over a reasonable period of time, not to exceed
5 years;2 (5) loans must be limited by the rules of the Internal
1 At trial, petitioners submitted Exhibit 7-G entitled
"Erie Industries, Inc. Employees' Profit Sharing Trust Summary
Plan Description", and the Court allowed the exhibit into
evidence as a summary plan description and not as a
representative copy of the Plan itself. Petitioners failed to
locate and produce a copy of the Plan.
2 The 5-year amortization period could be extended if the
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