CMC Posted November 21, 2020 Share Posted November 21, 2020 Plan sponsor discovers participant loans were defaulted because of errors by plan sponsor (including failure to start payments) over a number of years. The EPCRS Procedure sets out the steps the participant and employer can take in combination to fix that where there has not been a deemed distribution and 1099-R. But what is the "fix" (1) where there has been a deemed distribution and 1099-R but no actual loan offset or (2) where there has been a deemed distribution and 1099-R followed by a termination or other event resulting in an actual offset? If you were to go into VCP, what corrective measures would you propose? (I understand in scenario (1), the participant can repay the defaulted loan creating basis but don't see that they gain much by doing that.) Link to comment Share on other sites More sharing options...
Recommended Posts
Create an account or sign in to comment
You need to be a member in order to leave a comment
Create an account
Sign up for a new account in our community. It's easy!
Register a new accountSign in
Already have an account? Sign in here.
Sign In Now