TSA-403b loan
If a client has a loan with a TSA/403b, is that loan part of her contract value for calculation of her RMD?
Ex: 12-31-07 yr end value was: $8240.99 div by 22 (76 yrs old) = $374.59 rmd. TIAA CREF is stating that her rmd is $542.89 because she has an outstanding loan of $3484.77, which they added to her yr end value.
Are they right?
Thank you,
Doug
Permalink Submitted by Alan Spross on Tue, 2008-12-09 21:03
Yes, they are correct.
A loan does not reduce the account balance, as it is still considered as an asset of the plan until an offset distribution is processed. A deemed distribution also does not count toward the RMD itself if employee defaults on the loan.