Expert: Allen - 4/3/2008

Question
Our company is discontinuing our pension plan.  We also have a 401K.  I have borrowed money against my 401k.  Can I roll my pension into my 401K by paying off my loan without penalty?

Answer
Your question isn't clear to me.I think you are asking - can I pay off my 401k plan loan with the rollover of pension assets to the 401k plan? If this is your question, then the answer is no. You will have had a taxable distribution from the pension plan of the amount used to pay off the loan. This would be subject to income tax and the 10% excise tax for distributions before 59 1/2.

Write again if this isn't your question.