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Why Navigating Personal Loans is Crucial for Moderna Employees

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As a representative of The Retirement Group, a division of Wealth Enhancement Group, I advise Moderna employees nearing retirement to carefully consider the implications of family loans—both legal and financial—by setting clear expectations, documenting agreements, and consulting with professionals to ensure smooth transitions in financial and estate planning.' - Tyson Mavar

Moderna employees approaching retirement should view family loans with caution, ensuring they establish formal agreements and understand the potential tax and legal consequences, as proper planning can prevent unnecessary strain on both relationships and retirement assets.' - Tyson Mavar

In this article, we will discuss:

  1. The pros and cons of personal loans from banks versus family and friends.

  2. Key considerations for both lenders and borrowers when giving or receiving personal loans.

  3. The legal and fiscal responsibilities involved in family loans, particularly for Moderna employees nearing retirement.

In times of economic distress, many people may require more financial assistance. Employees of large companies, including Moderna, with good credit scores, may consider conventional bank loans as a solution. However, they are also accompanied by certain disadvantages, such as high interest rates and other fees, including loan origination fees that can be more than 1% of the loan amount.

For those with poor credit, borrowing from family or friends is still a common practice. This type of loan is particularly attractive because it often has either no interest or lower interest rates than traditional banks. In a 2018 survey by Finder, it was revealed that almost $184 billion is borrowed every year from personal contacts, which shows that it is a popular means of financial support during the difficult periods.

The Size and Nature of the Personal Loan Market

More and more people especially the young people in the Moderna are preferring to get the loans from friends and family to avoid the consequences of getting into debt from other institutions. This trend shows a willingness to help loved ones despite having consumer and educational loans. However, this kind of niceness may adversely affect the financial situation of the lender.

Experts including Steve Trumble, co-founder of American Consumer Credit Counseling advise that such personal loans be treated as much business-like as possible. It is very important to define the expectations for the repayment of the funds at the beginning of the cooperation in order to avoid the circumstances when the financial situation of the company is unclear and the relations with the partner are not clear.

Lender Alert: Things to Consider When Giving Out a Personal Loan

It is wise to take some precautions when giving money to friends or family in order to protect good relationships. Some tips that can be given in order to avoid the conflicts are as follows:


Manage Your Expectations: Know that you may not even get the money back that you lent. If you do not view the loan as a gift, then you are bound to be disappointed at one point or the other.

Evaluating Loan Feasibility: In her book “Money Smart,” Mary C. Kelly, Ph.D., notes that personal loans are not as restrictive as bank loans to involve collateral and strict time for repayment, which results in relaxed repayment manners.

Creating a Lending Checklist: It is also reasonable to make a list of questions that the borrower should be able to answer in order to determine their repayment willingness and ability. This includes asking them about their past borrowing history, what they intend to do with the money, and how they plan to repay it.

Fiscal and Legal Implications

There are also a number of financial and legal responsibilities that are another part of family loans. The IRS has set certain standards for the giving of money and the current exclusion amount is $17,000. The lenders have to find out these limits in order to avoid paying taxes that they have not even expected.

It also means that one has to consider how a loan may affect relationships, for instance, with a spouse or a partner. It is crucial that the partner is involved in the lending decision in order to avoid the conflict of interest and to respect the financial decisions that are made.

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The Key to Successful Family Loans: Strategic Planning

Family loans are inherently risky to lead to disputes and disappointments but can be reduced through proper planning and dialogue. Important steps are to write down an agreement, to define the rules, and to keep the channels of communication open.

In summary

Family loans are a good alternative to banking but they require some thinking and management in order not to adversely affect relations or put the borrowers in financial difficulties. Such loans are a valuable form of financial support that does not entail the same level of commitment as formal lending products if they are used properly. The effects on estate planning are important when it comes to lending to family members especially for the employees who are close to or are in retirement. Attorneys advise that any significant family loan should be incorporated into one’s will and that formal loan agreements should be executed in order that the estate proceedings are clear. This is because failure to document such loans can lead to a lot of legal battles among the heirs and this may lead to a lot of time being spent in court (American Bar Association, July 2021).

With the help of our guide, Moderna employees will learn how to work with family loans and manage financial relationships with friends and family. Learn how to set expectations, accept a personal loan with the lowest risk possible, and create legally valid documents. Learn about the importance of planning and communication for successful transactions. Make informed decisions that protect your assets, staying up to date with the latest legal information, including IRS and gift tax regulations. Just as when going on a hike, it is important to be well prepared in order to have a safe and rewarding experience for the lender and the borrower.

Sources:

American Bar Association. 'Estate Planning and Family Loans: Risks and Considerations.'  American Bar Association , July 2021,  www.americanbar.org/estate-planning-family-loans .

Kelly, Mary C.  Money Smart: Strategies for Financial Success . 2nd ed., Financial Intelligence Publishing, 2020.

Trumble, Steve. 'Managing Personal Loans Within Families: Best Practices.'  American Consumer Credit Counseling www.consumercredit.com/personal-loans . Accessed 31 Jan. 2025.

Finder. 'Survey: $184 Billion Borrowed Annually from Family and Friends.'  Finder.com , 2018,  www.finder.com/family-friend-loans-survey .

'Taxable Gifts and Loans: What You Need to Know About IRS Regulations.'  IRS.gov , U.S. Department of the Treasury, 2023,  www.irs.gov/taxable-gifts-and-loans .

What is the 401(k) plan offered by Moderna?

Moderna offers a 401(k) plan that allows employees to save for retirement by contributing a portion of their salary on a pre-tax or Roth after-tax basis.

How can I enroll in Moderna's 401(k) plan?

Employees can enroll in Moderna's 401(k) plan through the company’s benefits portal during the open enrollment period or within 30 days of their hire date.

Does Moderna offer a company match for the 401(k) contributions?

Yes, Moderna provides a company match for employee contributions to the 401(k) plan, which helps boost retirement savings.

What is the maximum contribution limit for Moderna's 401(k) plan?

For 2023, the maximum contribution limit for Moderna's 401(k) plan is $22,500, with an additional catch-up contribution of $7,500 for employees aged 50 and older.

Can I change my contribution percentage to Moderna's 401(k) plan?

Yes, employees can change their contribution percentage to Moderna's 401(k) plan at any time through the benefits portal.

What investment options are available in Moderna's 401(k) plan?

Moderna's 401(k) plan offers a variety of investment options, including mutual funds, target-date funds, and company stock.

How often can I change my investment choices in Moderna's 401(k) plan?

Employees can change their investment choices in Moderna's 401(k) plan at any time, allowing for flexibility in managing their retirement savings.

Is there a vesting schedule for the company match in Moderna's 401(k) plan?

Yes, Moderna has a vesting schedule for the company match, which typically requires employees to work for a certain number of years before they fully own the matched contributions.

Can I take a loan against my 401(k) with Moderna?

Yes, Moderna allows employees to take loans against their 401(k) balance, subject to specific terms and conditions outlined in the plan document.

What happens to my 401(k) plan if I leave Moderna?

If you leave Moderna, you have several options for your 401(k) plan, including rolling it over to an IRA or a new employer's plan, cashing it out, or leaving it with Moderna.

With the current political climate we are in it is important to keep up with current news and remain knowledgeable about your benefits.
Moderna offers a comprehensive retirement benefits package, which includes a defined contribution 401(k) plan. The company's 401(k) plan allows employees to make contributions through payroll deductions, with Moderna matching contributions based on employee elections. As of 2023, the contribution limit for Moderna employees participating in the 401(k) plan is $22,500, with an additional catch-up contribution of $7,500 for employees aged 50 and older​ (Mondaq)​ (KPMG). These limits reflect increases compared to the prior year, consistent with IRS guidelines. The plan offers both traditional 401(k) and Roth 401(k) options, allowing for tax-deferred or post-tax contributions, depending on the employee's financial strategy. Moderna also offers employer matching contributions, enhancing retirement savings for participating employees. Moderna’s plan provides various investment options, allowing employees to customize their retirement portfolios based on risk tolerance and retirement goals​ (Mondaq). Moderna uses its own specific acronyms, such as "RSP" (Retirement Savings Plan) for the 401(k) plan and "ModMatch" for its matching contribution feature. Employees become eligible for the 401(k) plan upon hire, and those who work at least 500 hours over three consecutive 12-month periods qualify to make contributions starting January 2024, as part of the SECURE Act amendments​
Moderna announced layoffs in 2024, primarily affecting its manufacturing unit, as part of a resizing strategy linked to its COVID production footprint. The company decided to cut jobs due to reduced demand for its COVID-related products and to optimize manufacturing costs. CEO Stéphane Bancel emphasized the importance of ongoing cost improvements in manufacturing as the company pivots away from focusing solely on COVID vaccines toward a broader pharmaceutical portfolio. Moderna expanded its headcount by 44% in 2023, but these layoffs reflect a necessary adjustment to its business strategy moving forward​ (FiercePharma).
Moderna provides its employees with stock options and Restricted Stock Units (RSUs) as part of their long-term incentive compensation. These programs are designed to align employee interests with shareholder value by granting ownership stakes in Moderna. Employees may receive Non-Qualified Stock Options (NSOs) and RSUs, which vest over time. NSOs give employees the right to buy Moderna stock at a pre-determined price, while RSUs grant shares upon vesting without the need for an initial purchase​ (SEC.gov)​ (Moderna). In 2022, Moderna reported that its stock option grants focused on driving financial and operational goals, including stock price appreciation. The company ensures that the majority of executive compensation is tied to at-risk components like stock options and RSUs. These awards are typically available to executives and employees in key roles​ (SEC.gov)​ (Moderna). The RSU program at Moderna also emphasizes long-term retention and performance, rewarding employees based on their contributions to the company's success. Moderna's stock options and RSU plans in 2023 and 2024 remained focused on aligning long-term incentives with business objectives, including the expansion of its pipeline and manufacturing capacity​ (SEC.gov). Executives and high-performing employees across various departments are eligible for these equity awards, ensuring their incentives are linked to Moderna’s overall performance​ (Moderna).
Health Insurance Options: Moderna provides multiple insurance plans, including health, dental, and vision coverage, ensuring that employees have access to preventive and medical care. These plans also include options for telemedicine and wellness care, reflecting industry trends. Lifestyle Spending Account: This program offers employees an annual allowance they can use towards fitness, nutrition, and other wellness activities, helping them maintain a healthy lifestyle. Personal Enrichment Benefit: This unique benefit provides an annual stipend for personal growth, such as attending language classes or certification programs like yoga instruction. Mental Health Support: Moderna prioritizes mental health with programs that offer support through Employee Assistance Programs (EAP), which include confidential counseling services. Family and Parental Benefits: The company has generous parental leave programs and fertility benefits, which have become standard in their competitive benefits package.
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For more information you can reach the plan administrator for Moderna at , ; or by calling them at .

https://rodgers-associates.com/blog/5-steps-successful-nua-transaction/ https://www.retirementwatch.com/the-net-unrealized-appreciation-nua-tax-strategy https://www.fidelity.com/learning-center/personal-finance/retirement/company-stock https://www.mondaq.com/unitedstates/employee-benefits-compensation/1377676/2023-retirement-plan-year-end-amendments-and-operational-compliancehttps://kpmg.com/us/en/home/insights/2023/11/tnf-notice-2023-75-pension-plans-cost-of-living-adjustments-2024.html https://tax.thomsonreuters.com/blog/irs-announces-2023-retirement-plan-dollar-limits-and-thresholds/ https://en.wikipedia.org/wiki/Moderna_COVID-19_vaccine https://www.irs.gov/retirement-plans/pension-plan-funding-segment-rates https://www.foxrothschild.com/publications/interest-rate-hikes-present-challenge-for-fully-funded-pension-plans https://www.mondaq.com/unitedstates/retirement-superannuation-pensions/1275478/secure-20-new-laws-expand-retirement-plan-eligibility-for-long-term-part-time-employees https://www.sec.gov/Archives/edgar/data/1682852/000130817923000184/lmrna2023_def14a.htm https://www.fiercepharma.com/pharma/moderna-lays-parts-manufacturing-team-after-rightsizing-covid-footprint https://investors.modernatx.com/news/news-details/2023/Moderna-to-Acquire-OriCiro-Genomics/default.aspx https://www.pharmanewsintel.com/news/moderna-to-buy-japanese-firm-oriciro-in-its-first-ever-acquisition https://www.thelayoff.com/t/1rlFrVQz https://www.nerdwallet.com/article/investing/retirement-statistics https://www.fidelity.com/calculators-tools/retirement-calculator/overview https://www.kiplinger.com/ https://www.daypitney.com/ https://www.milliman.com/en/

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