My company (a large health co) merged with a larger Pharm Co. In this process, we basically got all the Pharm Co benefits. When with the health co, I took out a 401k loan which had the provisions that if I was laid off/or left the company I could continue repaying the loan as long I made the bi-monthly payments.
As part of the conversion, we got a new 401k provider. I just checked with the provider and they confirmed, that no, under the new plan, it doesn't matter what I was originally told, now if I get laid off or leave the company, I have to repay the loan immediately or it will be taken out of my account and I will be hit will all the punitive taxes.
Is this legal? I wouldn't have taken it out if this was the case.