On Jan 1, 2024 we implemented a loan policy that allows a loan on the amount of 50% of vested balance not to exceed $50k. When our recordkeeper updated the system to reflect the new loan policy, they did not include the 50% of vested balance part. We had 12 employees in 2024 take out loans in excess of the 50% of their vested balance. Some loans were 90% or more of the vested balance. This is 100% fault of the recordkeeper as they have admitted. What recourse do we have against the recordkeeper? What options for corrections do we have. The recordkeeper showed us one option where the participant will have 60 days to pay back the excess or it will deemed a distribution. Has anyone else experienced this type of failure?
