of a primary residence), that a "reasonable" rate of interest be charged, and that substantially equal payments (with payments made at least every calendar quarter) be made over the life of the loan. Employers, of course, have the option to make their plan's loan provisions more restrictive. When an employee does not make payments in accordance with the plan or IRS regulations, the outstanding loan balance will be declared in "default". A defaulted loan, and possibly accrued interest on the loan balance, becomes a taxable distribution to the employee in the year of default with all the same tax penalties and implications of a withdrawal. Required minimum distributions (RMD) Account owners must begin making distributions from their accounts by April 1 of the calendar year after turning age or April 1 of the calendar year after retiring, whichever is later. The amount of distributions is based on life expectancy according to the relevant factors from the appropriate IRS tables. For individuals who attain age after December 31, 2019, distributions are required by April 1 of the calendar year after turning age 72 or April 1 of the calendar year after retiring, whichever is later. The required minimum distribution is not required for a particular calendar year if the account owner is employed by the employer during the entire calendar year and the account owner does not own more than 5% of the employer's business at any point during the calendar year. Required minimum distributions apply to both traditional contributions and Roth contributions to a 401(k) plan. A person who is required to make a required minimum distribution, but does not do so, is subject to a penalty of 50% of the amount that should have been distributed. In response to the United States economic crisis of 2007–2009, Congress suspended the RMD requirement for 2009. Required distributions for some former employees A 401(k) plan may have a provision in its plan documents to close the account of former employees who have low account balances. Almost 90% of 401(k) plans have such a provision. As of March 2005, a 401(k) plan may require the closing of a former employee's account if and only if the former employee's account has less than $1,000 of vested assets. When a former employee's account is closed, the former employee can either roll over the funds to an individual retirement account, roll over the funds to another