Loan Offset timing

[mrazny]

We have a vendor whose system will not offset a loan for a terminated participant until the balance is paid in full.

I always thought that the needed condition is just the distributable event, and that I don't need to carry phantom balances and interest on terminated participants awaiting the day that they take their account elsewhere.

We also have an IRS audit that is having issues with the Loan reporting and balancing for 5500 vs. the Vendor's loan reports, etc. Quite a pain. The participant has a balance well above $5,000.