It’s best to check with your existing 401k administrator regarding a few issues here.

The first issue is whether or not your plan allows for in-service distributions. If not, you will not be able to transfer any assets out of the plan unless either the plan or your employment with the company is terminated.

Next, you will want to talk with your administrator about the procedure for repaying the participant loan in full before transferring assets. Your outstanding loan balance will most likely be treated as a taxable distribution if it is not paid before transferring your assets out of the plan.

For more information on IRS distribution rules, see the following: http://www.irs.gov/retirement/sponsor/article/0,,id=151926,00.html

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