[Code of Federal Regulations]
[Title 5, Volume 3]
[Revised as of January 1, 2001]
From the U.S. Government Printing Office via GPO Access
[CITE: 5CFR1655.13]

[Page 292]
 
                    TITLE 5--ADMINISTRATIVE PERSONNEL
 
         CHAPTER VI--FEDERAL RETIREMENT THRIFT INVESTMENT BOARD
 
PART 1655--LOAN PROGRAM--Table of Contents
 
Sec. 1655.13  Distributions.

    (a) The Board will declare the unpaid loan principal, plus unpaid 
interest, to be a taxable distribution from the Plan if:
    (1) A participant is in confirmed non-pay status for a period of one 
year or more and the participant has not prepaid the loan as provided in 
Sec. 1655.17;
    (2) A participant separates from Government service and does not 
repay the outstanding loan principal and interest in full within a date 
which is the earlier of:
    (i) 90 calendar days after the date of the notice from the 
recordkeeper to the participant explaining his or her prepayment options 
that are available upon separation from Government service; or
    (ii) 90 calendar days after the date of the notice from the 
recordkeeper to the participant that, because his or her payments were 
incorrect or missing for 90 calendar days (pursuant to Sec. 1655.15(a)), 
his or her loan must be reamortized or prepaid in full or a taxable 
distribution will be declared;
    (3) There are incorrect or missing payments (as described in 
Sec. 1655.15) and the participant fails to or is ineligible to exercise 
one of the reamortization or repayment in full options set forth in 
Sec. 1655.15;
    (4) Any material information provided in accordance with 
Secs. 1655.10 or 1655.11 is found to be false;
    (5) The loan is not repaid in full (including interest due) within 
five years, in the case of any loan other than a loan for purchase of a 
primary residence, or 18 years, in the case of a loan for purchase of a 
primary residence, of the loan issue date;
    (6) The participant dies.
    (b) If a distribution occurs in accordance with paragraph (a) of 
this section, the Board will notify the participant or, in the case of 
death, the estate of the amount and date of the distribution. The Board 
will report the distribution to the Internal Revenue Service as income 
for the year in which it occurs.

[55 FR 979, Jan. 10, 1990, as amended at 61 FR 58756, Nov. 18, 1996]