Welfare Plan to Borrow Money from Pension Plan

[Guest ooota]

Can a welfare plan borrow money from a pension plan?

[david rigby]

Can a pension plan (not clear if it is a qualified plan) lend money to another plan?

Why would it do so?

Why would a welfare plan need to borrow money?

How can a welfare plan repay a loan?

[Ron Snyder]

oota: Can a welfare plan borrow money from a pension plan?

Me: If the plans are legally related (same employer), the loan would probably be a prohibited transaction.

Pax: (a) Can a pension plan (not clear if it is a qualified plan) lend money to another plan?

(b) Why would it do so?

© Why would a welfare plan need to borrow money?

(d) How can a welfare plan repay a loan?

Me: (a) Yes, of course. They can loan money to any unrelated party so long as the loan is a prudent investment.

(b) To earn interest.

© For liquidity purposes or to maximize investment return.

(d) With future cash flows.