Loan Default

[pmacduff]

I'm getting frustrated waiting for Support when trying to finish up a 06/30/02 val report... I have a participant who defaulted on his loan in a prior investment vehicle. That investment manager will be issuing a 1099-R next January. When the plan moved to the new funding provider, the loan was not included because it was already defaulted. I already had the loan in my software, and cannot now get it out. How do I default and distribute a loan balance without distributing the participants remaining cash balance? I tried following the Relius help screens, but it didn't work the way I was told to do it; it would default the loan, but also distribute the rest of the participant's balance! Any help is appreciated. (FYI I'm on version 7.1)

[pmacduff]

I'm happy to say that I think I have found a way to make this work. I did a census DER entering a distribution to the loan account for this employee, then ran a takeover transaction and it recognized the loan distribution. My only problem is that the "vested" balance on the report I'm using, still shows the loan principal balance. (Ending Balance does show as "0.00". Any way for me to get to that loan account vested balance amount and "0" it out?

[Tom Poje]

I think when I had a similar problem once.

If I recall, I showed a loan pmt for the full amount (you could create a dummy account) and then show a distribution from that account. Net effect was to zero out the silly thing.

If it makes you feel better, I had no luck following the help screen either.

[FAPInJax]

Version 7.2 permits the deemed distribution of the loan ONLY. This should fix the problem.

[Guest DottleC2]

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The loan principal balance that sticks in the vested amount I presume is a hangover from having processed a loan transaction?

You might consider, if you are allowed to do so, to bypass the loan transaction process all together, for this participant, and create a cash account called 'Loans' for this item.

If you don't have admin rights on your system, you may have to ask someone who does, to add the 'Loans' cash account.

Then use takeover transactions to post the transfer of principal and interest.

Bill