Loan overpaid

[ombskid]

Loan payments continued for several months after the loan was repaid.

Is the correction as simple as writing a check from the plan to repay the borrower for the overpayment?

[BG5150]

I would put the money in a suspense account in the plan and use it to offset the next contribution.

I am not a big fan of returning money to the company once it's invested in the trust.

[ombskid]

But if the $$ goes directly to the participant who overpaid - (through payroll deduction)?

[masteff]

Loan payments continued for several months after the loan was repaid.

Is the correction as simple as writing a check from the plan to repay the borrower for the overpayment?

That's how Fidelity does it.

[K2retire]

I would put the money in a suspense account in the plan and use it to offset the next contribution.

I am not a big fan of returning money to the company once it's invested in the trust.

Despite the fact that many sesrvic providers do distribute the money to keep their investors happy, forfeiting the money as BG suggests and paying the participant back outside of the plan seems more consistent with IRS correction methods.