"The client started a 401(k) plan in 2022, but did not terminate the DB plan until 2024. Can excess assets be made to the 401(k) started in 2022, or do I have to start a new 401(k) plan within 12 months of the last distribution?"

"Most recordkeepers we work with (we are a TPA) allow for online loans. Their procedure does not appear to have a separate online Promissory Note for the participant to complete. Curious if anyone else still prepares the promissory note in these situations or not. Thank you"

"We administer a 70 participant 401(k) plan that does allow for participant loans. The plan loan policy restricts loans to a few categories of need.... They had a participant who they later found that lied on his plan loan application and the loan proceeds were not used for the purpose he stated. The loan has been in place for about 6 months and he is current on all loan repayments.

"Because he lied on his application, the plan sponsor wants to demand full repayment of the loan by year end and if that does not happen, they want the balance of his loan to be offset and become a taxable distribution to him. The plan document allows for an offset that becomes a taxable distribution to the participant in cases of non-repayment or delinquent repayments of the loan. However, the document does not seem to allow for a loan offset / taxable distribution just because he was not truthful on what the loan was going to be used for.

"We think that they cannot just offset the loan so it becomes a taxable distribution even if the participant lied about what he was going to use the proceeds for. Does anyone agree? Disagree?"