Approval of Participant Loans in 401k

[CLE401kGuy]

In an effort to assist clients and their participants with the participant loan process, our office would like to work with participants directly when they request loans. Plan Loan Programs in our documents indicate: "The Plan Administrator is authorized to administer the Participant loan program. All applications for loans shall be made by a Participant to the Plan Administrator on forms which the Plan Administrator will make available for such purpose."

This is boiler plate language across all of our Corbel / volume submitter plans. We'd like to allow the participant to initiate the loan with us directly to save time for the Plan Administrator and his / her personnel to avoid / limit back and forth with participants taking new loans.

Can our office assume the responsibility from the Plan Administrator? If yes, should our office request a sign off from the Plan Administrator indicating they authorize our office to work directly with participants on loans?

At the tail end of our process, we provide the Plan Administrator with the amortization schedule to set up the loan payments in their payroll system.

Any suggestions are welcome.

P.S. We work with Nationwide, but have found it difficult to convert to their online Loan Module system due to limitations regarding how participants are charged and how loan numbers are assigned by their system.

[mbozek]

In an effort to assist clients and their participants with the participant loan process, our office would like to work with participants directly when they request loans. Plan Loan Programs in our documents indicate: "The Plan Administrator is authorized to administer the Participant loan program. All applications for loans shall be made by a Participant to the Plan Administrator on forms which the Plan Administrator will make available for such purpose."

This is boiler plate language across all of our Corbel / volume submitter plans. We'd like to allow the participant to initiate the loan with us directly to save time for the Plan Administrator and his / her personnel to avoid / limit back and forth with participants taking new loans.

Can our office assume the responsibility from the Plan Administrator? If yes, should our office request a sign off from the Plan Administrator indicating they authorize our office to work directly with participants on loans?

At the tail end of our process, we provide the Plan Administrator with the amortization schedule to set up the loan payments in their payroll system.

Any suggestions are welcome.

P.S. We work with Nationwide, but have found it difficult to convert to their online Loan Module system due to limitations regarding how participants are charged and how loan numbers are assigned by their system.

Having authority to approve plan loans would make you a fiduciary.

[CLE401kGuy]

We act as fiduciary on our plans so that will not be an issue, thanks for your response, much appreciated!