Late deposit earning loan repayments in Relius

[BG5150]

Participant is due $1.80 in earnings due to a late deposit of a loan payment.

How do I process that in Relius?  

Do I just do a Loan Payment for the participant and only allocate $1.80 in interest?  Will that mess up the amortization schedule?

[Bri]

Isn't that just a gain transaction on the rest of the account, rather than anything to adjust the loan balance by?  (Maybe it matters how daily-val you're using Relius for here)

[BG5150]

The accounts are daily val on Relius.

[Bri]

gotcha.  I think your idea makes sense, post it as a 1.80 payment going in, no change to the principal balance due on the loan.

[BG5150]

but will it mess up the interest due otherwise?  Will the final payment be off?

 

[Artie M]

This amount should just be earnings that goes into the participant's account.  These lost earnings are technically interest paid on a loan the employer is considered to have taken from the participant's account during the period of time the loan payment was being held by the employer before being sent to the trust.  The participant did not pay this interest, the employer did.  It is considered like the employer took a separate loan from the participant's account and must pay interest on that separate loan.  It is the earnings that were lost  (should have been earned in the participant's account( because the payment of the loan repayment was not sent to the trust on time   Accordingly, the payment of these lost earnings should not affect the amortization schedule of the original loan.  Again, due to it being an untimely deposit of the loan payment, it is not an amount owed by the participant on the participant's loan but an amount owed to the participant by the employer due to its prohibited transaction loan.  Make sense?

[Bri]

The interest is calculated on the remaining principal, so if the 1.80 isn't changing the balance due, your loan schedule should remain unchanged.