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I have been practicing in this area since ERISA became the law of the land, so it is interesting to find something that seems like it should be obvious, but apparently isn't. The question is When does a participant loan failure become reportable on Schedule G of Form 5500. The filing instructions say not to report the following: Do not report in Part I participant loans under an individual account plan with investment experience segregated for each account, that are made in accordance with 29 CFR 2550.408b- 1, and that are secured solely by a portion of the participant’s vested accrued benefit. Report all other participant loans in default or classified as uncollectible on Part I, and list each such loan individually. But, ERISA Reg. Section 2550.408b-1 requires that the loan be made in accordance with the plan's written procedures. Which, if any, of the following would you consider a prohibited transaction? a. Written loan program satisfies conditions of DOL regulations and IRS standards to avoid taxation, but: A loan is made in excess of $50,000. A loan is set up with semi-annual payments. The loan payment schedule is o.k. but payments are inadvertently not started on time. Issue is discovered and corrected before the end of the default period. b. Written loan program does NOT satisfy the conditions of the DOL regulations, loans may be made up to 50% of vested balance of NHCEs or 100% of vested balance for HCEs. c. Loan is made that is consistent with IRS requirements, but written terms of plan do not permit such loans. Errors is corrected under EPCRS. It seems to me that case b. would trigger reportable PTs. It seems that case a.3. should not be a PT. But, things like cases a.1. and a.2. happen and I rarely/never see them reported on Schedule G. They are either treated as taxed or corrected under EPCRS. Case c. can be corrected under EPCRS, but sure seems like it would not be an exempt transaction. Remember for purposes of schedule G - all employees of the plan sponsor are Parties In Interest. So - what do you guys think? Thanks in advance - Becky