blue Posted October 18, 2007 Posted October 18, 2007 If you freeze a 401(k) plan, can you allow loan repayments to continue.
masteff Posted October 18, 2007 Posted October 18, 2007 Yep, and depending on the language for how it was frozen, could even allow new loans to be taken. I've seen this in acquisitions where the acquired plan is frozen and employees are moved to the purchaser's plan. Kurt Vonnegut: 'To be is to do'-Socrates 'To do is to be'-Jean-Paul Sartre 'Do be do be do'-Frank Sinatra
austin3515 Posted October 18, 2007 Posted October 18, 2007 I'll go a step further and suggest it woul be imprudent from a fiduciary perspective to disallow loan repayments. This would definitely be a fiduciary no no. Not to mention the adverse tax consequences on the participants who would receive deemed distributions. Austin Powers, CPA, QPA, ERPA
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