Belgarath Posted January 4, 2021 Report Share Posted January 4, 2021 Never seen this one... client wants to NOT allow prepayment on participant loans. Not seeing anything in 1.72(p) or 2550.408(b)-1 specifically prohibiting this, but it seems wrong on so many levels that I've got to assume this has been addressed somehow before. First, it doesn't seem like ERISA would pre-empt state law on this question, so if state law doesn't allow for such a provision on loans, then that nixes it, perhaps. Then I start thinking about fiduciary issues - if a participant wants to pay it off early, and the plan/fiduciary won't allow it, then the participant is, in essence, being forced into an investment that is perhaps "underperforming." Etc., etc., - anyone ever heard of this question coming up? Link to comment Share on other sites More sharing options...
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