401k loans based on prior 401k rollovers
If a 401k plan allows loans, can rollovers to this plan from an employee’s prior firms create the basis from which to draw the loan?
I have a client who has just begun at a new firm so has no 401k savings accumulated at her new location. If she rolls over two older 401ks to this plan,vs rolling them to a TIRA, would she be able borrow it from the plan under typical 401k loan rules?
Permalink Submitted by Alan Spross on Tue, 2012-05-01 17:24
Probably would be able to under most plans that already allow loans, but she should check with the plan before doing the rollover.
Permalink Submitted by Greg Henson on Mon, 2012-05-07 19:24
Most companies allow for the rollover source to be borrowed against but it is plan-by-plan. If the retirement committee set that as a rule then yes. Sources of money (ie: employee deferral, employer match, roth, etc) are decided by her new company on what can and cannot be borrowed. She could call her HR department and ask, call her new record keeper, or ask for an SPD.
Permalink Submitted by Hennery Paul on Fri, 2012-10-26 05:12
It depends upon the company, So she just need to check the plan and contact with the company’s HR or with her Boss.