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Message Boards Digest

June 8, 2021

Here are the most recently added topics on the BenefitsLink Message Boards:

Dougsbpc created a topic in Distributions and Loans, Other than QDROs

Repayment Deadline for Coronavirus-Related Loan

"As many probably remember, initially it was indicated that a participant could take up to a $100,000 participant loan through the CARES Act. It was also described that the repayment could be deferred for up to a year. Then after reviewing closer, the year was to be no later than January 1, 2021. In any event, there was confusion on this. I thought I read something about how a repayment will be considered timely if it was made on or prior to February 28, 2021. Did anyone else remember this? I cannot seem to find anything on it."

No replies yet   |    Click Here to Add a Reply

austin3515 created a topic in 401(k) Plans

Participant Loans/Rollover of Note Following Loan Offset

"I've been reading up on all of the rules regarding loan offsets and the ability to recontribute those amounts through the extended due date of their tax return following loan offset. But what has not been made very clear anywhere is how these rules interplay with the ability to rollover the note itself following offset. So in my example, loan offset was processed by the Plan as of April 30 based on their loan policy. This employee was included in a group of employees that are 'Spinning off' into a new entity. They want the employee to be able to roll the balance over to the new plan.

Can I still roll over the note even after the loan offset? That's the big question. The final regs that came out 1.402(c)(3) seem to make no mention of this whatever. 1.401(a)(31)-16 definitely talks about rolling over notes following offset, but its not clear to me if the new regs extend the date on which that is allowable. And even if it did, it raises other questions about the 5 year term as follows:

* What if the note is not rolled over for a year? Presumably the loan would be reamortized as on an approved leave, but I figure someone must have written this down somewhere by now.

* What if the 5 year term is already over? Presumably the new sponsor should not accept it (or maybe if the loan payments would exceed their paycheck).

Again it just seems like this should be addressed one way or another. Can anyone point in the direction of what I am missing?"

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Tom created a topic in Distributions and Loans, Other than QDROs

Decedent Had No Designated Beneficiary

"Participant dies and has no designation of beneficiary form. The participant's spouse died 15 years ago. The plan document provides for default beneficiaries as first spouse, if no spouse, then children equally. There are 2 children. I believe the 2 adult children are to both receive 50% of the participant's account. The plan sponsors asked if this should go through probate. It never entered my mind that this would go through probate since there are living children. I'm not a lawyer. I started to doubt myself. I did a little research and it does appear that this would not go through probate. It's not a large amount but still -- need to be sure. The plan administrator (doctor) would make the decision on this--but of course looks to us as TPA to tell them what to do. Comments?"

4 replies so far   |    Click Here to Add a Reply

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