401k loan - wage type remaining balance has to be cleared

[Former Member]

Hi,

my client has cleared his 401k loan account - with direct payment to loaner AUL.

Now I need to clear the wage type "remaining balance" about $7,000

How can I do this?

The loan started in 2005 and the total loan amount was entered in infotype 0015 (in year 2005) - let say $20,000

My idea is to reduce the amount "remaining balance" in infotype 0015 to $13,000 - with original start date in 2005

But then I force a recalc about 10 years

Is there another way to clear?

Thx Rita

[former_member235056 · Accepted solution]

Hi Rita,

Please have your 401K loan wage type set-up for deduction and balance set-up using Processing class 50 such that you now need to entr goal and balance amount of $13,000 on IT15 and per period deduction amount on IT14.

There is a link table V_T51P1 where you need to set-up your wage types accordingly. Use memo wage types to copy set-up.

Thanks,

Ameet

[former_member193210]

I'm not familiar with US Payroll, but I am with Canadian deductions with Balance and Total, so I hope that my suggestions will be helpful.

As you mentioned, one way to reduce the remaining balance is to modify the initial total to reach.

An other way would be to create the deduction (of $7000), make an equivalent Net Cash Advance (of $7000), and tell Finance not to send that money to the Third Party and to make the appropriate General Ledger entries to cancell out the Payroll entries (the deduction & the payment).

But the best option as far as I am concerned, would be to create a special "401K Loan Balance Adjustment" WT, make it available on IT0015, and create the appropriate PCRs so that it would reduce the Balance owed without affecting the employee's Net Pay nor the Third Party Remittances.  This is a lot more work but would leave a much cleaner trail for the Auditors as a Note could be attached to the IT0015 justifying the Adjustment.

[Former Member]

Thx for your helpful answer. Finally I created a new wage type to adjust the balance.