Participant Loan - terminated participant

[Pammie57]

A participant terminated 07/31/2017 with an outstanding loan balance.  She wanted to pay it back monthly after her termination.  The plan document says it's taxable to her the "day after termination". and does not allow her to continue to pay on the loan "forever".....Question: can she pay a lump sum now, and if so, roll it with the other cash to an IRA? .  How long does she have to pay it back and not violate/default on the loan now that she is terminated? and be able to roll it to the IRA?  I know usually loan payments are late the last day of the following quarter.   I hope this makes sense.  Thanks for any feedback. 

[TPAJake]

Our loan policy gives them 60 days to pay it off in a lump sum after termination, but I don't think I've ever seen anyone actually do that.  Check the doc or loan policy to see what yours says about timing & method. 

[RatherBeGolfing]

Your 

2 hours ago, Pammie57 said:

A participant terminated 07/31/2017 with an outstanding loan balance.  She wanted to pay it back monthly after her termination.  The plan document says it's taxable to her the "day after termination". and does not allow her to continue to pay on the loan "forever".....Question: can she pay a lump sum now, and if so, roll it with the other cash to an IRA? .  How long does she have to pay it back and not violate/default on the loan now that she is terminated? and be able to roll it to the IRA?  I know usually loan payments are late the last day of the following quarter.   I hope this makes sense.  Thanks for any feedback. 

what is the actual language in your document (AA, base document, loan policy, loan note, etc)

[CuseFan]

If she has the money to pay it off she can just roll her balance (after loan offset) directly to IRA and then send check for loan balance to the IRA with documentation that it's for the loan offset. I did exactly that myself 14 years ago without a problem. This can be quicker than waiting for a payoff amount, sending in payoff, waiting for it to post and then requesting total payout, but it is more complicated - for the participant and IRA custodian - not the plan or the RK.