terminating a plan's loan policy

[Guest Pat Metallic]

An employer with a 401(k) plan wants to terminate the plan's loan policy. Is a resolution to terminate the policy all that is needed?

[Alan Simpson]

I would also include either an amendment to the plan document removing the loan provisions (if not using a prototype) or a new adoption agreement (if using a prototype) indicating that the loan provisions have been removed from the plan. Either of these two options should be backed-up by a Board Resolution.

As a side note, if there are any outstanding loans how are you going to handle them?