Loan Repayments

[Guest blackacre]

Is there a specific time requirement within which an employer has to forward payroll deducted amounts for repayment of a loan from a participant's 401(k) account? The employee reports that the repayment amount is taken out of each pay check but that it is not forwarded to the plan administrator for weeks making the posting of the repayments several pay periods behind.

Thanks for your help.

[Harwood]

The Dept. of Labor feels that loan repayments should be treated like employee deferrals and after-tax contributions: remit as soon as possible.

http://www.dol.gov/ebsa/regs/aos/ao2002-02a.html

http://www.dol.gov/ebsa/faqs/faq_VFCP.html

[Guest blackacre]

Harwood,

Thank you so much for your prompt and helpful response. I appreciate it very much.

blackacre

[Guest carsca]

Do you need to file Form 5330 with the IRS in this case?