Loan Policy requires repayments through payroll reduction... other options?

[AlbanyConsultant]

Seems like every few years, there's a thread about whether a plan sponsor can enforce the loan policy to have loan repayments only be deducted from payroll.  Here's one good one from about two years ago:
https://benefitslink.com/boards/index.php?/topic/61537-stopping-loan-payments-while-still-employed/

Let's go with the premise that if someone wants to cease their loan deductions while still employed, you cannot stop them.  If the loan policy says that loan repayments are through payroll deductions only, do you then have to allow the participant to repay the loan through some other method?  Or are they voluntarily dooming themselves to default?

Thanks.

[RatherBeGolfing]

3 hours ago, AlbanyConsultant said:

Let's go with the premise that if someone wants to cease their loan deductions while still employed, you cannot stop them.  If the loan policy says that loan repayments are through payroll deductions only, do you then have to allow the participant to repay the loan through some other method?

The plan/employer CANNOT withhold voluntary payroll deductions without authorization or after authorization has been withdrawn. The plan CAN dictate how loan payments are made, for example, only through payroll deduction.  

[QDROphile]

I do not want to start this debate over again, but, subject to state law (and all the states I am familiar with are OK with this), the plan can be designed to effectively prevent an employee participant from electing to stop payroll deductions for loan payments.  It is not generally done because of (1) ignorance about how to do it, which requires a sophisticated use of state law, and (2) it increases administrative burden, which the big providers are unwilling to contemplate and the sponsors (except for paternalistic compliance nuts) are unwilling to pay for directly or indirectly even if someone offered it to them.  So if y'all agree to quit saying it CANNOT be done I agree to stop arguing that it in fact SHOULD be done to comply with the ERISA rules.  But you don'f have to agree.  This my final post on the subject because it matters to no one, least of all the regulators.   

[RatherBeGolfing]

10 hours ago, QDROphile said:

So if y'all agree to quit saying it CANNOT be done I agree to stop arguing that it in fact SHOULD be done to comply with the ERISA rules.  But you don'f have to agree.  This my final post on the subject because it matters to no one, least of all the regulators.   

No need to debate it again, the premise of OPs question was not whether or not you could prevent the participant from stopping payroll deductions for loan payments.  The question was if you cant prevent them from stopping payroll deductions, do you have to provide them with another option for repayment.  I think we can agree that the plan is under no obligation to provide an alternative repayment option.

[QDROphile]

Indeed.