acquire new company

[mehmgo]

have a plan that does not allow for participants to take loans from the plan. the plan has acquired a new company that allows employees to have loans and there are 2 employees that have outstanding loan balances. the assets will transfer to the new plan. Can the outstanding loan balances be transferred to the new company and continue to make payments until paid in full? Or do they have to be defaulted and taken as income before the transfer of assets occurs? They do not want to allow any new loans be taken out of the current plan.

[12AX7]

OK to transfer the existing loans into the plan. You'll have to see how the Plan Document wouid facilitate the process and not allow new loans to be taken. If the Plan Document is perhaps silent on the issue, then the Plan Administrator can write up a procedure.

[david rigby]

the plan has acquired a new company ...

Presumably this means "the plan sponsor acquired..."

Presumably "acquired" refers to "...purchased the entire ownership of..." and does not refer to "... purchased the assets of..."

If otherwise, please specify.

[12AX7]

Me thinks he means "Plan Sponsor" that acquired another company. I only answered in the context of transferring loans into the plan. I didn't feel like sorting out the other issues that you have brought up. Expert guidance is required in this situtation.