On top of that, consider a couple other suggestions. Maybe your plan should only permit one loan at a time or there should be a limit on the size and scope of the loans. You should also consider your procedures for monitoring and collecting loans from participants after they have terminated employment and establish a procedure for keeping track of whether those loans have been satisfied. Since non-conforming loansare clearly a component of the IRS’s audit package for 401(k) plans, it pays to know more about loans, better manage them and accurately report them before you face an audit. So don’t simply assume plan loans are being handled properly. Look into them now and fix your mistakes. If you need assistance, your attorney at Fox Rothschild can help you sort it out..
A loan from a 401(k) plan must be your last resort. Prior to taking this loan consult with a professional to determine if the loan is necessary and if it will solve your problem. Remember even if you must file bankruptcy your 401(k) plan can not be touched by creditors.
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- Pulling funds from 401(k) may hurt later (usatoday.com)
- Is the Recession Causing Small Retirement Plans to Skimp on Compliance Efforts? (401kplanadvisors.com)
- Eight suggestions for improving your 401(k) plan (401kplanadvisors.com)