Participant Loans

 

Loan Process

It would be easy to simply process participant loans upon the employee’s request. However, since accuracy and compliance are cornerstone principles at Pinnacle Financial Services (Pinnacle), we go the extra mile managing loan requests.

We review prior to final authorization to ensure:

The loan is allowed per the terms of the plan document.

The participant is active and the vested percentage is accurate (if applicable).

The total allowable loan amount is accurate.

The Pinnacle process is purposely more in-depth to ensure accuracy and regulatory compliance and may differ from what you may have done in the past.

Upon receipt of a loan request, Pinnacle will contact the employer and ask them to:

Verify that the participant requesting the loan is an active employee.

Verify the plan’s payroll frequency to ensure payments are made on a per payroll basis.

Verify any applicable information pertaining to vesting.

Upon receipt of this information a final review is made that includes: vesting verification, reconciliation of contributions, and determination of a distributable event. Pinnacle will then contact the Plan Administrator for authorization and signature*.

Once authorization is received, Pinnacle will coordinate with the investment company for the release of funds. From the date the request is received, there is generally a 7-10 business day processing time from when the loan request is made to when the funds are received.

 

*If 3(16) Fiduciary Services was elected, Pinnacle will coordinate with 3(16) Fiduciary Services to approve/sign.

Learn more about how we work with you.