401k Loan Defaulted due to EMPLOYER/SPONSOR inablility to administer l

[Guest 401khelp]

Pls help...I am in default of a 401k loan because of an employer/sponsor administrative error. What are my options? I have been making payments since 9/17/97 and am still making payments on a 54 month loan. I don't know where my money has gone nor do they.

[david rigby]

do you have cancelled checks? pay stubs showing a deduction for loan?

You might want to send an inquiry to the Plan Administrator (note, the capitalization is significant) in writing stating your concerns and requesting that they reconcile any questions.

[RCK]

In the interests of full disclosure, I am employed by a plan sponsor.

Have you gotten any statements in the last 62 months?

RCK

[mbozek]

There is a fiduciary issue here in that you have made payments on a loan for 62 months that was supposed to be paid off in 54 months. I Think you need to file a claim with the plan admin requesting a statement of payments on the loan and where they were applied. There is something wrong here. If you made the payments then the loan should be paid off. If the funds were deposited to the wrong account then the plan admin has to find the funds and apply them to pay off the outstanding loan and you should receive a refund for the last 8 months payments. It is the employer and plan admin responsibility to tell you where your payments have gone. You may want to retain counsel if the plan admin can't answer the above questions and provide you with a refund.

[austin3515]

Don't forget the DOL loves these things... If you have trouble getting it, you may not even need a lawyer... Just call the DOL...

That's obviously a last resort though...

[mbozek]

Austin: the Dol is extremely overburdened and understaffed to handle individual complaints against plans and like the EEOC the investigations are usually cursory and involve asking for a written reponse from the Plan adm which could take months. The participant needs to get an answer regarding where the money that was suposed to repay the loan is and to get a refund of the 8 extra payments ASAP. Having an attorney call the PA will speed up the process. Otherwise the plan will continue to withold the loan repayments and not apply the funds to repay the loan. The only reason to involve the DOL is if the loan repayments were stolen.

[Guest 401khelp]

Originally posted by pax

do you have cancelled checks?  pay stubs showing a deduction for loan?

You might want to send an inquiry to the Plan Administrator (note, the capitalization is significant) in writing stating your concerns and requesting that they reconcile any questions.

I have already done that and have not yet received a reply. They have recently switched Payroll pkg from MSA to ORACLE and it seems that they have failed to convert prior years data and no longer have access to the old system, making it a manual process to produce a report of payroll deductions for the 401k loan payments. This is a multi-billion $ company with some 3000-4000 employees worldwide and they can't produce a simple rpt from there PR system. I think I have most but not all of my paystubs. I have contacted the Pension & Welfare Benefits Admin. and they think there is something to look into regarding the posting of the payments taking from my paycheck, but that doesn't much help me stop the 1099 action that is being taking against me.