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Showing results for tags 'takeover'.
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New client has outstanding loans with missed payments. Some loans have not been paid on at all going back a year. I was going to give the following options to the client for correcting. Please let me know if there are any issues with these: 1. Catch up loans for all missed payments including interest and start loan payments on next payroll. 2. Re-amortize loans, with new start date but same end date as original loan so it is still paid off within 5 years of the loan origin. If this is allowed, the interest rate of the original plan was higher than the current so I would re-amortize using the current (lower) interest rate. 3. Have participants take out a second loan for the missed payments, and contribute the money back to the plan and start both loans on next payroll. (assuming the plan allows for 2 loans and the second loan does not exceed the limit based on their balance or $50k) 4. Have 59.5 employees take in-service distribution (trued up for taxes) for missed loan payments, and contribute the money back to the plan. Note: none of these loans are for HCEs.
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After reviewing prior posts, it seems as if it is no surprise when a takeover plan document is unsigned. Has anyone come across a situation in which a company acquires another company (let’s call the other company, “Target”). Target has a signed 401(k) prototype plan. Prior to sponsoring the prototype plan, Target sponsored an individually designed plan, which was never signed. The prototype vendor used the unsigned document to create the prototype and never asked for anything more. Company wants to merge Target’s 401(k) plan into its own 401(k) plan but is concerned that Target’s prior unsigned individually designed document will taint its 401(k) plan. Should we simply ignore Target’s prior unsigned document, or is this a real concern that would justify a VCP filing?
