BG5150 Posted October 20, 2021 Posted October 20, 2021 Did the plan need to have loan provisions already in place before they issued CARES loans? We have a client that issued an $80,000 loan without having a loan provision in the plan. Could we retroactively amend the plan to allow for loans? QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
RatherBeGolfing Posted October 20, 2021 Posted October 20, 2021 The plan had to allow loans first since CARES temporarily increased the limits rather than establish an additional type of loan. I think retro amendment is ok as long as long as the loans were made primarily to NHCEs. Luke Bailey 1
CuseFan Posted October 20, 2021 Posted October 20, 2021 Agreed, that's one of the correction actions that you can do via amendment. Luke Bailey 1 Kenneth M. Prell, CEBS, ERPA Vice President, BPAS Actuarial & Pension Services kprell@bpas.com
BG5150 Posted October 20, 2021 Author Posted October 20, 2021 Thanks. Now it looks like there's a resolution to add loans int he file, but no formal amendment, SMM or anything like that. Plus, I don't think there was any sort of loan documentation created when he took the loan. QKA, QPA, CPC, ERPATwo wrongs don't make a right, but three rights make a left.
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