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The language in the plan document pertaining to the maximum amount of the loan generally follows the language in the Internal Revenue Code, except for the issues other people have identified. But it is perfectly appropriate for the amount requested by the participant to be expressed in dollars and not in percentages--that happens almost all the time. The participant usually wants a dollar amount for a specific purpose where the cost is known. Some participants, if allowed by the plan, will request "the maximum available" if they are making a large purchase such as a house or paying tuition, and since the value of an account fluctuates, the amount of the loan would not be determined until it is actually processed.

Are you saying the participant must also self certify that "I am not a crook" in order to get the loan?

First off, it's 50% of the vested account balance - that's an important distinction. Second, as Bri points out, it's not correct in the event there are other loans. Even if the plan only allows a single loan at a time, the $50,000 limit is still reduced by the highest outstanding loan balance in the past year. If you wanted your language to apply, the plan would need to say that a participant may only have one outstanding loan at a time, and also that they may not take another loan until at least 1 year after the final repayment of the previous loan has been made.

Maybe ask FTW.

The easiest place to look is in the instructions for Schedule I for the 2022 Form 5500 page 49 Line 4k. The instructions include examples which use a limited partnership to illustrate how the rules apply. The example also discuss how you may qualify for the audit waiver if the plan has an adequate amount of fidelity bond coverage. 2022-instructions.pdf

I looked at the FTW basic DB document, assume DC is same. In definition of year of eligibility service for elapsed time you count 12 months from the date of hire, and it says for periods shorter than 12 months you substitute such shorter period in that definition. The 3 months is satisfied 7/3 (7/2 - depending on how you interpret and there have been countless discussions on that in this forum) and entry is 1/1/2024. Note the document also says in aggregating elapsed time service for eligibility for non successive periods that 30 days equals a month.

"Let me make one thing perfectly clear" - for those of us old enough to remember...😁 Thanks CB - this is helpful.

My experience with Form 5500-EZ paper filings (before electronic filing) is that the IRS often processed deficiency letters for information returns that unquestionably had been filed. That the IRS had signed a certified-mail receipt confirming that the Form 5500-EZ was received did not slow down processing the mistaken deficiency letters.

If a nonowner employee is a participant at any point during the plan year, Form 5500-SF should be used.