Can a plan's maximum loan limit be less than 50% of the vested account

[Guest Suanne]

Can a plan's document limit the maximum loan to something less than 50% of the vested account balance, for example 20% of the vested account balance?

[R. Butler]

Yes.

[Guest]

I agree that a Plan may limit the loans to less than 509% of the vested account balance. The 50% is a maximum permitted by statute, but a Plan is always permitted to be more restrictive--remember the Plan does not have to have loans at all.