Delegating Loan Administration -- Foolish?

[sloble@crowleyfleck.com]

Company wants to have insurance company administer loans (approve, pay, collect, etc.). This is an ERISA 403b with employer contributions that is administered by NY Life.

Is this a good idea? We would try to get a hold harmless agreement for tax errors and attempt to allocate fiduciary liability for loan processing under ERISA 405c.

[R. Butler]

We work with one recordkeeper that is now taking over the administration of loans. Thus far it has not been a good experience. They constantly fine tune their policies & don't communicate those changes well. That creates problems because the plan sponsor's loan programs often appear inconsistent with the recordkeeper's ever changing loan policies.