Tuesday, September 25, 2018

Quick Reference for Participant Loan Processing

As a plan sponsor, you're responsible for ensuring participant loan requests conform to the plan's loan policy. And you'll also want to prevent delays and extra work for you and your participants.

Below are a few tips to help manage this process smoothly:
  • Watch for email notifications alerting you to approve or deny a submitted request.
  • Review the loan request's start date, and confirm it corresponds with a payroll date that is not in the past.
  • Review the frequency of loan repayments and confirm it aligns with the participant's payroll frequency (weekly, bi-weekly, etc.).
If your plan doesn't offer online loan processing, or even if it does, there are several advantages beyond participant convenience you may not have considered:
  • Loans can be requested using either the employee or plan website.
  • The online process ensures that requests comply with your plan's loan policy, such as the maximum loan term allowed, minimum loan amounts, or restrictions on assets available to fund a loan.
For more information on processing loans, refer to your plan administrator's guide, found on your plan website under Resources and then Guides.