The DGA Pension & Health Plans have extended the opportunity for participants to take temporary loans of up to $20,000 against their supplemental benefit retirement funds “as part of ongoing efforts advocating for member relief during the COVID-19 crisis.” The loans had previously been allowed through July 31, but will now be available through the end of the year. The extension was approved unanimously by the Plans’ board of trustees.
The Plans told participants that before applying for the loans, they should “seek alternative means of support in order to preserve your retirement funds to the extent possible and ensure the availability of adequate financial resources during your later years. Other options may include bank loans or other emergency resources, including those provided by the various relief funds available to entertainment industry workers.”
Key terms of the loans include:
• Loan amount is limited to the lesser of $20,000 or 20% of your account balance
• Minimum loan amount is $1,000.
• Loan amounts will be permitted only from the vested portion of your account balance.
• Interest rate for every loan is set at prime plus 1 percent and is fixed for the life of the loan.
• Up to two outstanding loans, not to exceed $20,000 total, will be allowed at any time during the loan availability period.
• Loan repayments must be made quarterly, beginning with the first full quarter following the quarter in which the loan is distributed.
• If you are taking a loan due to certain enumerated reasons related to COVID-19 — i.e. financial hardship due to being quarantined, furloughed, laid off, having hours reduced, unable to work due to child care, or closing/reducing business — you may elect on the application to defer loan payments for up to one year.
• Loan must be fully repaid within five years, and can be repaid in full at any time without penalty.
• For married participants, spousal consent will be required for loans of $5,000 or more.