IRS issues new rollover rules for qualified plan loan offset amounts

Greater clarity on eligibility and timing of participant loan rollovers.

As part of an IRS regulation that became effective January 1, 2021, the 60-day rollover deadline for a participant’s qualified plan loan offset (QPLO) was extended and is now based on the federal income tax filing due date (including extensions) for the tax year in which it occurred. The regulation clarified when a plan participant is eligible to rollover a qualified plan loan offset (QPLO), which occurs in the event of a plan termination or if a participant defaults on a loan(s) within 12 months of severance from employment with the employer. The extended date gives participants more time to come up with the money to rollover part or all of their QPLO.

We will be communicating this change to all impacted participants in early Q4, 2021 via email or letter.

Please reach out to your managing director if you have any questions.

Additional Resources:

For plan sponsor or investment professional use only.

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