Christopher Wilson Posted August 9, 2019 Posted August 9, 2019 A plan accepts rollover contributions of participant loans. The plan permits only one loan outstanding at a time. A participant has two participant loans with his former employer. Is he permitted to rollover the two loans or only one of the loans? Is the treatment of the two loans determined with respect to the plan's loan policy or rollover contribution provisions?
C. B. Zeller Posted August 9, 2019 Posted August 9, 2019 Barring any language to the contrary, the plan's loan policy document governs the making of new loans. So the receiving plan could accept the two loans as a rollover and then not permit the participant to take another loan until those have both been paid off. I suppose the receiving plan could limit rollover contributions to no more than 1 loan, if desired. This would probably have to be spelled out in the document though. Christopher Wilson 1 Free advice is worth what you paid for it. Do not rely on the information provided in this post for any purpose, including (but not limited to): tax planning, compliance with ERISA or the IRC, investing or other forms of fortune-telling, bird identification, relationship advice, or spiritual guidance. Corey B. Zeller, MSEA, CPC, QPA, QKA Preferred Pension Planning Corp.corey@pppc.co
Luke Bailey Posted August 12, 2019 Posted August 12, 2019 Totally agree with C.B. Zeller. Luke Bailey Senior Counsel Clark Hill PLC 214-651-4572 (O) | LBailey@clarkhill.com 2600 Dallas Parkway Suite 600 Frisco, TX 75034
chc93 Posted August 13, 2019 Posted August 13, 2019 Maybe too late, but could the 2 loans be consolidated into 1 loan in the prior plan, then roll over the 1 "new" loan...
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