Plan Loan Repayment Terms

[Guest a206536]

Hello, I have a loan outstanding from my Solo(k) plan that was set up with quarterly loan repayments. My custodian Voya Financial (clears through Pershing) hired a TPA to administer all qualified plan loans for plans under their custody. I notified the new TPA in writing about quarterly payments and sent them the loan agreement as proof. The TPA started billing me on a monthly basis so I called them about it. They told me that their system cannot handle quarterly payments and for me to wait until the bill for the third payment is received and pay the bill that includes 3 monthly payments.

I have taken this approach for several quarters. For the most recent bill they added a $14 late payment fee.

Questions:

1) do they have the authority to change my loan terms?

2) if they refuse to keep adding late fees do I have any recourse other than changing custodians

3) is there any way that I can take over custody for the loan since I was already doing the administration: loan doc, amort schedule, accounting for loan payments, etc. It is very frustrating to be charged $48 per year for loan admin to a TPA that cannot accommodate my loan terms.

Thanks!

[Mr Bagwell]

Run like Forrest and find a new provider.

Not having quarterly loan payments as an option in a recordkeeping system is inconceivable.

And then charging late fee..... no thanks!

[BG5150]

Is there anything in the service agreement that allows them to charge a late fee? For what? You are not paying the TPA or Voya, you are paying the plan.

Also, I would refuse to pay the late fee, as, per the loan note, the payments are indeed NOT LATE.

And, like Bagwell said, loan software that doesn't have quarterly payments? Ridiculous. Our software goes beyond quarterly even, with semi-annual and annual payments allowed.

[GMK]

It might be useful to those of us who need to select service providers for the plans we sponsor to know who this TPA is ... if you'd care to tell us. Thanks.