Qualified plan loans – What you don’t know can hurt you

Description

Abstract: Among the risks of offering workers a “qualified” retirement plan (one that follows certain rules to qualify for beneficial tax treatment), such as a 401(k), is that the arrangement may allow participants to take loans from their accounts. Although employees often appreciate this feature, taking out a qualified plan loan can get workers into trouble — and hurt their companies as a whole. This article gives an overview of how qualified plan loans work for employers who may not be fully aware of all the risks involved. (Updated: 8/28/12)