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if you call your Congressman/woman, tell him /her that 1.401(a)(4)-4(e)(3)(iii)(G) indicates right to each rate of match is a BRF issue and since the plan already has to pass the ACP test that should be enough and the BRF isn't needed.

Check out EOB 2013 edition 1A.36 and 1A37. There is a discussion on this very similar scenario. I'll closely type the section. Minor children attribution not disregarded. Although a husband and wife might not be attributed each other's ownership interests in the respective businesses, if the have minor children (under 21), other attribution rules may result in a controlled group relationship. Under the stated facts of the example, Husband and Wife are not attributed each other's ownership interests in their respective businesses. Normally then, Husband's wholly-owned corporation would not be part of a controlled group with Wife's wholly-owned corporation, because the companies have no common owners. But suppose they have a minor child. The minor child is attributed the stock in each company. This creates a controlled group relationship because the minor child, as the common owner by attribution, owns 100% of each company. Comment: controversy on this issue. .......At a Q&A session with the IRS at the 2012ASPPA annual conference, IRS representatives indicated that, until there is a statutory change made by Congress, the IRS would follow the literal wording of the statute.

You also have an absurd plan provision/loan policy that does not restrict such action. Just an FYI. Loan provisions in a plan can be modified; suggest the client consider that.

New loan policy needed?????

Also, this would not be a rollover, as US retirement accounts can be rolled over only to other US retirement accounts. On the US side, this would be just a regular distribution.