Loan Default / IRA Rollover Contribution

[austin3515]

Participant is employed by Company A which sells it assets it to Company B. So Person A is going to default on his loan because Comapny A does not allow rollovers of participant loans from its plan.

BUT, person A is eligible for Coimpany B's Plan and rolls over their account to Company B's Plan. Company B also allows loans. Can person A take a loan from Companyu B and use the proceeds to roll over to a rollover IRA, thereby eliminating the "default"?

[ETA Consulting LLC]

Yes. It's not a "loan default", but a "loan offset".

No problem.

[austin3515]

Agreed on the loan offset.

Thanks!