ATPA

Best "guess" as to what occurred: Many plans do not allow terminated (non-employee) participants to take partial distributions. Only Lump Sum distributions of the entire account are allowed. This makes sense, as the Plan Sponsor does not want to spend extra time/money on non-employee participants. Partial distributions were probably incorrectly allowed. Someone caught it and now you are being denied a partial distribution. They should be able to send you the plan document (not SPD) page showing this. The plan document rules in this situation, not the SPD. If this is the case, then your best bet is to roll it to an IRA and take partial distributions from the IRA.

When there are 2 loans involved, the calculation is not entirely clear. So providers use a reasonable interpretation of the rules and allow the total principal lent in a 12 month period to be $50k, taking into account all loans taken in the previous 12 months. That is why the amount is the same regardless of which loan is repaid.