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How is that NOT discriminating on the basis of national origin? You can't do that, so don't do that. And that's my opinion until somebody provides me with a citation that says otherwise.

And they probably also missed the "with no US income" part

You can't do that, so don't do that.

By not breaking the law...

Sorry, but I remain steadfast. You may NOT exclude persons who are not authorized to work in the USA. If they work, you may not rely on the fact that they are doing so illegally to reduce or eliminate their benefits. This is well settled. At least before 1/20/2017.

I don't think the line is drawn between those who are of US "national origin" and those who are "not of US national origin" because the line only excludes those who are NOT in this country "legally." You may actually INCLUDE some people from Mexico who are here LEGALLY and yet exclude those from Mexico who are here ILLEGALLY. The distinction is not based on national origin AT ALL, but rather on a different criteria.. But, I still think you are confessing to the crime of employing those not in this country legally, and that is a problem....

Are you sure that the legal professional didn't say you could exclude NON-resident aliens?

How about 1.402(c)-2?

The way I see this - yes, you can exclude a group of employees for a variety of reasons (as long as your exclusion does not violate some other law - like age, race, etc.). The problem with this request is that it BY DEFINITION seeks to exclude a group of employees that IT WAS/IS ILLEGAL TO HIRE/EMPLOY. Want to put into a document an exclusion of people you shouldn't have hired, and then CONFESS that you did so by actually excluding them in practice (thereby admitting that you KNOW they are employed illegally)? Yea. Good luck with that.

Bird you are correct that the selection is in the loan policy. However, the basic plan document also provides : Section 8.06 (f) Security. All loans shall be secured by no more than one-half of the vested portion of the Participant's Accounts (determined immediately after the origination of the loan) and such additional security as the Plan Administrator may deem necessary. All loans made to Participants under this Section are to be considered Trust Fund investments and shall be segregated as provided in Article 9 hereof unless the Plan Administrator provides otherwise. Section 9.02 (c) Loans. If the Adoption Agreement does not permit Participant self-direction, any assets that are held in the form of a Participant loan made pursuant to Article 8 shall be treated as a segregated investment unless otherwise provided by the Plan Administrator.

Does the plan definition of beneficiary answer the question? (Read it twice.)

FTW has an option- 38. If the plan does not permit participant self-direction, are loans treated as a segregated investment Yes / No Interestingly, it is in the " Items Below Do Not Affect Plan Document" section so I guess it will only be in the loan policy, not the document itself. Better than not at all I guess.