mming Posted April 1, 2020 Share Posted April 1, 2020 A participant has been repaying their plan loan as slowly as possible, i.e., relying on the IRS cure period for every payment - for example, any repayments due during the first quarter of 2020 wouldn't be paid until the end of June. With the passage of the CARES Act, could the repayments due during the first quarter (or at least prior to March 27, 2020) now be postponed for 1 year, or do you think the Act allows only postponement of repayments originally due after March 27th, without the application of the cure period? Link to comment Share on other sites More sharing options...
RatherBeGolfing Posted April 1, 2020 Share Posted April 1, 2020 2202(b)(2)(A) if the due date pursuant to subparagraph (B) or (C) of section 72(p)(2) of such Code for any repayment with respect to such loan occurs during the period beginning on the date of the enactment of this Act and ending on December 31, 2020, such due date shall be delayed for 1 year 72(p)(2)(B) is the 5 year maximum term, 72(p)(2)(C) is substantially level amortization requirement Id say the actual payment per the amortization schedule would need to be scheduled on or after March 27, 2020 Link to comment Share on other sites More sharing options...
ratherbereading Posted April 1, 2020 Share Posted April 1, 2020 Also, it's up to the plan sponsors if they want to adopt these changes. 4 out of 3 people struggle with math Link to comment Share on other sites More sharing options...
Belgarath Posted April 1, 2020 Share Posted April 1, 2020 Also, it has to be a "Qualified individual." It does NOT apply to everyone who just feels like delaying a loan payment. Link to comment Share on other sites More sharing options...
Larry Starr Posted April 1, 2020 Share Posted April 1, 2020 20 hours ago, mming said: A participant has been repaying their plan loan as slowly as possible, i.e., relying on the IRS cure period for every payment - for example, any repayments due during the first quarter of 2020 wouldn't be paid until the end of June. With the passage of the CARES Act, could the repayments due during the first quarter (or at least prior to March 27, 2020) now be postponed for 1 year, or do you think the Act allows only postponement of repayments originally due after March 27th, without the application of the cure period? A perfect example of why our loans (the very few we have) always require salary deduction repayment. How was this set up that allows the employee to skip his payments? Sounds like he is a real PIA! BenMgr 1 Lawrence C. Starr, FLMI, CLU, CEBS, CPC, ChFC, EA, ATA, QPFC President Qualified Plan Consultants, Inc. 46 Daggett Drive West Springfield, MA 01089 413-736-2066 larrystarr@qpc-inc.com Link to comment Share on other sites More sharing options...
mming Posted April 2, 2020 Author Share Posted April 2, 2020 Thanks everyone. Ya got him pegged, Larry - he's an owner. Link to comment Share on other sites More sharing options...
Luke Bailey Posted April 17, 2020 Share Posted April 17, 2020 mming, there is a fuller discussion of this topic, along with related issues, here: Luke Bailey Senior Counsel Clark Hill PLC 214-651-4572 (O) | LBailey@clarkhill.com 2600 Dallas Parkway Suite 600 Frisco, TX 75034 Link to comment Share on other sites More sharing options...
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