401k Loans Setup

unknown

We are interested to know how other companies have setup 401k loans. Are they setup as a deduction or a benefit plan?

Thank You

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unknown

We set ours up as a declining balance deduction on the PR14 screen.

marty

We download 2 files from our 401k provider - 1 for additions/deletions/changes and 1 for loan information. For loans we set up a PR14 deduction using the information (per paycheck deduction and the balance). We use BN31.2 for the regular deferrals. Our employees must go through the provider for anything to do with loans, and to make changes in deferrals, and it works really well for us.

unknown

At both companies I have worked at that used Lawson payroll, 401k loans were set up as straight deductions with a descending balance. At the one company there was a lifetime limit of 12 loans and the employee was permitted to have multiple active loans, so payroll set up 12 deduction codes, 4L01 thru 4L12. At the other company the employee is only allowed to have one loan at a time and it was not desired to keep the history, so one deduction code was set up for the loans.

Jill

The loans are set up on PR14 with a descending balance. Only one loan is allowed at a time so there is only one loan deduction code; however, each time a new loan is taken it is tracked with a unique loan number on a user field (401k Loan, with value being LN1, LN2, LN3, etc.) The value corresponds to a identifier on the vendor side.

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