Tag: plan loans

retirement

IRS Spells Out Two Available Plan Loan Computations

The Internal Revenue Service (IRS) on April 20 clarified the two ways defined contribution (DC) plans can calculate maximum participant loan amounts in a memo that should bring some relief to plan sponsors and administrators.

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New Overtime Rule Changes May Extend to 401(k) Plan Deductions, Plan Loans

By Arris Reddick Murphy, FedEx Corp. The U.S. Department of Labor’s (DOL’s) much-discussed final rule on overtime pay announced in May focuses primarily on updating the salary and compensation levels needed for executive, administrative, and professional (EAP) workers to be classified as exempt. But it may have implications for some of these workers’ 401(k) retirement […]

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Plan Loan Activity Slowed Slightly in 2015, ICI Says

The plan loan activity of participants in employer-sponsored 401(k) plans that allow it declined slightly in the first three quarters of 2015, but remained steady with the previous-year period’s levels, according to a recent survey. As of September 2015, the latest available data when the Investment Company Institute issued the report, 17.6 percent of defined contribution plan […]

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Economists Say 401(k) Plan Loan Policy Shapes Borrowing

Decades into reviewing the pluses and minuses of 401(k) defined contribution retirement plans, most employer plan sponsors have chosen to offer plan loans, which on the one hand give participants early partial access to their retirement funds but also threaten to erode those savings. A new paper suggests that plans’ loan policy can shape participant borrowing, […]

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Fidelity to IRS: Change or Pull Hardship / Loan Guidance

Fidelity Investments told retirement plan sponsors and investment professionals in a late April notice that it had asked IRS to change or withdraw recently updated guidance on maintaining documentation for participant hardship withdrawal and plan loan requests. In a message on its website, Fidelity, one of the largest U.S. private-sector retirement plan recordkeepers and investment […]

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Retirement Plans Advised Not to Push Loan Access

Defined contribution plan participants who take out plan loans are more likely saving at a lower contribution rate than most, and are not likely to repay the loan when they leave their employer. This according to a new report based on research from New York Life Retirement Plan Services’ DC data. With those factors in […]

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‘Reasonable Interest Rate’ Debate Continues

Employers and plan administrators will be better able to administer plan loans and meet the prohibited transaction exemption, since the IRS has given them a clearer picture of what constitutes a “reasonable rate of interest.” The IRS has provided this assistance in guidance it published in the Winter 2012 edition of its “Retirement News for […]

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