Distribution & Outstanding Loans

[R. Butler]

Relius has always confused me with loans. If a person is 80% vested and takes a loan, Relius takes the money from the total account balance and makes the person 80% in the loan. This doesn't make any sense to me.

I have a terminating participant requesting a distribution. He has an outstanding loan (only about a month old.). Relius wants to distribute about $200 more than I think should be distributed.

Example: Balance before loan is $3,988.85, vested balance is $3,191.08. Participant takes $1,500 loan. Relius Profit Sharing Source Balance after loan $2,488.85, vested balance $1,991.08. Loan Repayments of $119.04. Relius Profit Sharing Source Balance is $2,607.89, vested balance $2,086.31.

It seems to me the initial loan should be shown as a withdrawal from the vested balance. Balance after loan is $2,488.85, but the vested balance should only be $1,691.08. After considering repayments Balance is $2,607.89, but vested balance should be $1,810.12 (3,191.08-1500+119.04).

Am I missing something pretty basic? If I am not missing anything, how do I make Relius do what I want it to do (ie, Allocate loan withdrawals/repayments entirely to the vested portion of the account.

[R. Butler]

After sleeping on this, it became clear to me that I was just reading the Relius report wrong. Relius does readjust the account for the nonvested portion of the loan and actually does come up with the essentially the same distribution amount as I do. I just needed to play with the distribution transaction and narrow my reporting period to see it.