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granted to USAA a security interest in her vested USAA SIP
account balance to the extent necessary to secure the loan.
The loan agreement provided:
Payroll Deduction Authorization
I authorize USAA to institute continuing payroll
deductions in the full amount of each installment of
principal and interest payable on this note until the
loan is repaid in full. I understand that principal
and interest payments shall be due and payable at the
end of each payroll period throughout the term of the
loan. * * * If my employment with USAA ends, then the
unpaid balance of the loan plus any interest as of my
last day of employment shall become due and payable
immediately. * * *
* * * * * * *
Separation From Service
I understand that after I separate from service, I have
90 days to repay my outstanding loan balance plus any
interest as of my last day of employment. Also, I
understand that if I do not make such repayment within
90 days after my separation from service, the accounts
in which I have given a security interest will be
permanently reduced by the amount of the outstanding
loan and will be treated for all purposes as a
distribution to me. I also understand that the
outstanding balance may be taxable income to me.
On December 21, 2000, petitioner was paid for the period
from December 3 through 16, the last period paid in 2000. In
accordance with the loan agreement, $122.67 was withheld from her
pay as a payment on the loan. On December 26, 2000, petitioner’s
employment with USAA was terminated. On January 2, 2001,
petitioner was paid for the period from December 17, 2000,
through her termination date of December 26, 2000. The $122.67
loan payment was not deducted from her pay for this period
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Last modified: May 25, 2011