Form 14568-E - Model Vcp Compliance Statement Schedule 5 Plan Loan Failures (Qualified Plans And 403(B) Plans) Page 3
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Plan name
EIN
Plan number
Section IV - Description of Proposed Method of Correction
If the plan sponsor is requesting relief from reporting loans as deemed distributions,then complete Sections IV A, B or C,
as applicable.
If the plan sponsor is only requesting postponement of reporting loans as deemed distributions on Form 1099-R, then
proceed directly to Section IV D.
A. Correction for loans in excess of IRC Section 72(p)(2)(A)
Any participant affected by this failure will make a corrective repayment to the plan. After repaying the excess of the
loan amount over the maximum loan amount under IRC Section 72(p)(2)(A) (the “excess loan amount”), the remaining
balance of the loan will be repaid over the remaining period of the original loan (not beyond the period permitted
under IRC Section 72(p)(2)(B), determined from the original date of the loan) in a manner that complies with the
frequency and level payment requirements of IRC Section 72(p)(2)(C). The excess loan amount that will be repaid by
the participant is determined based on how previously made payments have been applied to the loan. The previous
loan payments were applied as follows: (check applicable box, and complete necessary information)
Prior loan payments were made in accordance with an amortization schedule that complied with the requirements
of IRC Section 72(p)(2)(B) relating to the terms of the loan and IRC Section 72(p)(2)(C) relating to frequency, and
level loan payments. For the purpose of determining the excess loan amount and the remaining outstanding
amount of the loan to be repaid over the remaining period of the loan, the previously made loan payments will be
applied as follows: (check box that applies)
1. Solely to reduce the portion of the loan that did not exceed the maximum loan amount under IRC Section
72(p)(2)(A). Result: The corrective repayment would equal the excess loan amount plus interest thereon.
2. To reduce the excess loan amount to the extent of the interest thereon, with the remainder of the
repayments applied to reduce the portion of the loan that did not exceed the maximum loan amount under
IRC Section 72(p)(2)(A). Result: The corrective repayment would equal the excess loan amount.
3. Pro rata against the excess loan amount and the maximum loan amount under IRC Section 72(p)(2)(A).
Result: The corrective repayment would equal the outstanding balance remaining on the excess loan
amount on the date that corrective repayment is made.
Prior loan payments were not made in accordance with an amortization schedule that complied with the
requirements of IRC Section 72(p)(2)(B) or (C).
Methodology for determining the excess loan amount that will be repaid and the remaining outstanding balance of
the loan that will be amortized over the remaining period of the loan
After the corrective repayment is made (Check one of the two options listed below)
Option 1: The remaining loan balance will be repaid according to the original amortization schedule. (This
option is available only if the original amortization schedule would result in the loan being repaid
within the maximum period permitted under IRC Section 72(p)(2)(B) determined from the original
date of the loan.)
Option 2: The loan will be reformed to amortize the remaining principal balance as of the date of repayment
over the remaining period of the original loan, provided that the recalculated payments over the
remaining period comply with the requirements of IRC Section 72(p)(2)(B) determined from the
original date of the loan.
14568-E
Catalog Number 66149Q
Form
(Rev. 9-2017)
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