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Agreed. There is no statutory prohibition, and there appears to be no plan prohibition. Assuming the person is getting a paycheck from which loan payments can be withheld and assuming that is another loan condition/requirement, then it looks like all the boxes are checked for allowing the loan.

In the absence of specific language to the contrary, based on the information given, I'd say it should be allowed.

One of today's items in the Benefits Link newsletter had a write-up on hardship distribution self-certification. The following is an excerpt. I don't read Section 312 of SECURE 2.0 as containing any such restriction. What am I missing, if anything? Employers may now rely on an employee self-certification that they have experienced a hardship and that the employee has no other funds available to satisfy the hardship. Self-certification is only available for the first hardship request during a plan year. If the participant requests more than two hardship distributions in one year then the employer is required to have physical proof of the hardship.

ERISA § 413, which Paul I points to, governs a fiduciary-breach claim under ERISA’s title I. ERISA does not specify a limitations period for a benefit claim. Federal and States’ courts’ interpretations and applications vary, and sometimes “borrow” a period from a relevant State’s law. Claims under banking, insurance, securities, and other law might involve yet different periods. Instead of assuming the risk of error about which rule or rules might apply and how a court might interpret and apply them, a fiduciary might consider, with its lawyer’s evaluation and other help, negotiating an insurance contract under which one premium covers the tail risks with the insurer underwriting the risk on how long the fiduciary’s exposure continues. Just my musing; not advice to anyone.

No, VCP is not required. But Gary's advice is good!

Excellent article about "Industry Concerns re Roth Catch-ups" in June 23 PlanSponsor. The "industry groups" are asking for Congressional action on this but our specialists are indicating that, since this is a revenue issue for Congress, they (industry groups) may not get any delay. We (FuturePlan 401(k) and 403(b)) also use Relius. I know there is a comprehensive amendment (for SECURE 2.0 issues) coming but do not have a date. The mechanics involved in administering this provision do involve more than the language in the plan document. There are also payroll concerns, etc. Not very specific but hope this helps! Patricia Neal Jensen, JD,VP 403(b) SME FuturePlan

IRS Regulatory agenda has proposed regs scheduled for December, 2023. Which, of course, doesn't preclude the possibility of additional (sub-regulatory) guidance between now and then.

Also kills the automatic top heavy exemption, which is not a big deal for lots of plans, as they either aren't top heavy, or are making other contributions so that the automatic exemption isn't applicable anyway. But sometimes is an issue.

Keep in mind that this will cause the plan to lose its top heavy exemption, if that's a concern for this client.

I know this is over 2 years later, but I happened to be looking at the 8950 instructions earlier today, and they have been updated to address these questions for current Anonymous VCP submissions.

If you are calculating the match on a payroll basis (don't confuse calculation with deposit), then you will never use compensation over the limit, unless the pay for that period is in excess of $285,000 (I want that job!). If the comp did go over the limit that pay period, you should restrict the compensation to the limit for that pay period. Also, it is good policy to put match caps in place in your payroll system. If it's dollar for dollar up to 5% of pay, you instruct the program to cap the match at $14,250. If you are calculating the match on an annual basis, then you are already (or should be) capping the formula with the max comp. Kevin, what would you do in the case of someone who makes $$600,000 a year and decides to put in her deferral in the last payroll of the year, or out of the late-September bonus check? Does she not get the match b/c she passed the cap sometime in July?