Company wants to have insurance company administer loans (approve, pay, collect, etc.). This is an ERISA 403b with employer contributions that is administered by NY Life.

Is this a good idea? We would try to get a hold harmless agreement for tax errors and attempt to allocate fiduciary liability for loan processing under ERISA 405c.

We work with one recordkeeper that is now taking over the administration of loans. Thus far it has not been a good experience. They constantly fine tune their policies & don't communicate those changes well. That creates problems because the plan sponsor's loan programs often appear inconsistent with the recordkeeper's ever changing loan policies.