For members of the Michigan State Police Retirement System




A plan loan is available if you occasionally need access to your money for non-recurring financial needs. Bear in mind that the size and frequency of loans may affect the amount of money you will have at retirement. It’s always a good idea to stay fully invested until retirement, to improve your chances of retirement readiness.

You can borrow from your 457 account and pay yourself back with interest through after-tax payroll deductions. There are two types of loans: General loans, with a repayment period of 2 months to 60 months; and loans for the purchase of your primary residence, with a repayment period of 61 to 360 months.

How Loans Work

The minimum loan amount allowed is $1,000.
The maximum is the lesser of 50% of your employee contributions or $50,000, minus your highest outstanding loan balance in the last 12 months and any defaulted loans, including accrued interest on defaulted loans.
Loans are available from either the 457 plan or from the 401(k) plan, but only one loan may be taken out at a time.
There is a $75 non-refundable initiation fee for each loan and an $8.75 per quarter loan management fee.
All outstanding loans must be kept up-to-date when you go on leave of absence (except military leave) and repaid when you terminate employment within 30 days or the loan will default and the balance will become a taxable distribution to you.
The interest rate for loans is the Prime Rate as quoted in the Wall Street Journal on the first day of the month prior to the month in which the loan is requested.
Loans for the purchase of a home require a signed promissory note.

When you borrow from your 457 account, the loan payment (which includes principle and interest) is repaid with after-tax money automatically deducted from your bank account. Both the principle and interest are applied directly to your 457 account.

You can request or model a loan, or see your current loan balances by logging in to your retirement investment account, or by calling the Plan Information Line at 800-748-6128.

For additional detail, see the Loan Policy Statement.

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