If your plan has participants with outstanding loans, we will need a full list of all participants with loans, their outstanding balances, and their amortization schedules (if possible). Participant loan deductions must continue to be included on all payroll files until the participant’s loan balances are paid in full. Even during the blackout period of conversion, loan payments must still be added to payrolls. Loan payments must continue to go to the previous provider up until the last payroll is processed.
Once you are processing payrolls through Vestwell, participant loan payments must be present. If loan payments are not included, after 90 days the outstanding loan balance will be cashed out and taxed like a distribution.