How to help participants avoid taxation of outstanding loan balances u

[Guest Pat Metallic]

Employer A has a 401(k) plan that is terminating. Employer B purchased the business and will probably retain many of the employees with Employer A. Employer B has a profit sharing plan without a 401(k) feature.

Employer A will have many participants with outstanding loan balances upon plan termination and would like to help these employees avoid taxes on these loan balances. Many of them cannot afford to repay them before the plan terminates.

Any suggestions on how to avoid these tax consequences?

[Guest]

Pat interesting dilemma

Employer B can avoid the issue for the employees it picks up by :

1.adopting the Employer A plan;or

2. by having a Trust to trust transfer from the A plan to an Employer B plan, does B have a plan, does it permit loans

Query,

Does the A plan require immediate repayment of outstanding loans should the plan terminate or when an employee terminates service?