Just discovered an employee with two 401K loans had paid off first loan a year ago. We received no notice of payment and employee did not notice it on loan history website. Twenty-nine overpayments were applied to the employees second loan without authorization from employee or notice. This is the second time the company we hired to manage the 401K has done this with an employee in two years. Is that legal? Employee would have preferred to stop making TWO payments when first loan ended and continued on amortization schedule for the remaining loan.
Seems also to be a breach of fiduciary duty as well as illegal.
