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401 K Loan Deductions

Former Member
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Our Company has interface which feeds Data from Sap to Great West for 401k loan deductions. Great west accepts the loan amounts as in multiples of the loan repayment.When the employee gets paid and the amount in arrears table gets deducted

not in the multiples of 401k loan payment .The requiremnt is the wage type needs to be deducted in the multiples of the loan repayment (that is $ 50 and the repayment should be $50,$100,$ 150...)But in sap the loan repayment amount deduction is not inmultiples from arrears table.Some times it deducts $70 for the loan repayment. The great west rejects thie payment because it is not in multiples of the laon repayment.

Accepted Solutions (1)

Accepted Solutions (1)

Former Member
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Hi ,

have u resolved ur issue with 401K loan? please suggest how u did?

I am also facing the same. After setting priority also if it go to arrears due to some LWP in the same month ?

Former Member
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This message was moderated.

Former Member
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401(k) distribution, taken as a loan: What are the tax implications?

Can someone explain the above for me.

Rgards

[Certified Forensic Loan Auditors|http://certifiedforensicloanauditors.blogspot.com/]

Edited by: Lehman on Sep 19, 2011 1:11 PM

Answers (1)

Answers (1)

Former Member
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If the loan repayment amount is fixed and if Great West has a policy of Deduct zero or full --> which means for example - if employees gross 1000USD , Taxes is 300 USD , pretax deduction is 275$ and say employee has taken 400$, then the possible net pay is 25$. Regular 401K loan per pay period is 50$.

1. If great west wants 401K loan deduction to deduct as much as possible, then SAP will recover 25$ this period and net pay will be zero. The balance 25$ will written in arrears table. So in the next period's payroll it will deduct 25$ + 50$.

The arrears amount will vary depending on the money the employee has left.

2. If the Great west wants to set up the 401K loan as - deduct all or nothing (deduc zero or full). Which means in the same example...if employee has left with only 25$ before 401k deduction, then SAP will not recover the 25$ because it try to deduct full 50$ or nothing. 25$ will be paid as net salary. 50$ will be written in arrears.

In next period 50$ + 50$ will be deducted. To set this

go to SM30 , type table name V_t51p6 set it 6 in arrears and 1 in retro. Please create this entry with proper dates.