Drawing Benefits from the Plan


Loans from your account are permitted in accordance with the rules governing loans set by the IRS, your provider’s product, and the plan’s provisions. While loans from the plan may be made for any purpose, the Plan Administrator will determine your eligibility for a loan.

Maximum Loan Amount:  The maximum amount of your loan is generally the lesser of:

  1. 50% of your account balance under the Plan; and
  2. $50,000.00
  3. TIAA Plan Loans:  Loans made under the Plan from TIAA may not exceed the lesser of  $50,000 and forty-five percent (45%) of the value of the participant’s vested account balance (as of the valuation date immediately preceding the date on which such loan is approved by the Plan Administrator).

You should contact your provider to determine your loan amount and submit a loan request.

Minimum Loan Amount:  The minimum loan from the Plan is $1,000.00

Loan Repayment Period:  The loan repayment period is generally five years; the minimum period is one year. Loans for use in purchasing your principal residence may be repaid over periods up to fifteen years.

Outstanding Loans:  You may have only two loans outstanding at any time.

Loan Defaults:  If you default on your loan payments, then your loan will be considered a taxable distribution to you from the plan. Additionally, a loan currently in default precludes you from taking another loan under the plan.


Distributions from the plan are made upon your request. Each Provider offers a wide variety of payment methods:

You may use more than one method, and draw benefits at different times. You should contact your provider to discuss which payment method best suits your needs.

Distribution Trigger Events:  Distributions from the plan are payable to either you or your beneficiaries upon one of the following “trigger events:”

Authorization: Only the Dept. of Higher Education, which is the Plan’s Administrator, can authorize your requests for distributions from the Plan.

Financial Hardship: The IRS defines “financial hardship” to be an immediate and heavy financial burden that cannot be met by other resources. The Plan Administrator will determine your eligibility for a distribution from the plan because of financial hardship.

The Commonwealth utilizes the IRS ’ safe harbor to administer hardship withdrawals. This means that you must take all loans for which you are eligible from the Commonwealth’s plans prior to being eligible for a hardship withdrawal. Additionally, you must discontinue your contributions to the plan for six months immediately following receipt of your hardship withdrawal.

You should write to the DHE via email (403bplan@bhe.mass.edu) to request the application form for a hardship withdrawal. You should anticipate providing reasonable documentation of your claim of hardship (e.g. invoices, letters of eviction/foreclosure, etc.) along with your completed application.

Your Provider will also require an application for the hardship withdrawal. However, only the Plan Administrator at the DHE can authorize the withdrawal.

Rollover of Distributions:  The plan will rollover distributions to a qualified recipient plan or Individual Retirement Account upon your request. Please note that not all distributions are eligible for rollover treatment. You should discuss distribution methods with your provider, and tax matters with qualified counsel.

Required Minimum Distributions:  The IRS requires minimum amounts to be distributed from the plan to you after you attain age 70 ½ and have employment with the Commonwealth. You should contact your provider(s) to determine the amount of your required minimum amount.

Taxation: Income tax is payable on amounts you draw from the plan. Your provider will assist you with any tax withholding that is either required by state and federal governments or requested by you. You should discuss all tax matters relating to the plan with qualified counsel.

Early Withdrawal Penalty:  Certain distributions paid prior to your attaining age 59 ½ may be subject to a 10% Early Withdrawal Penalty imposed by the IRS. The penalty is in addition to regular income tax that may be due on the amount you receive from the plan.