"Accrued Interest" During "Cure Period"

[Guest cjk]

A plan allows for participant loan and also provides for the maximum "cure period" as defined in the final loan regulations. The "cure period" ends on the last day of the quarter following the quarter during which the participant missed a loan repayment. In your opinion, does the regulations require that "interest" be charged on the missed loan repayments that are made prior to the end of the "cure period"? In my opinion, the regulations are not explicit in this regard. I believe that the regulations could be interpreted either way, and that either interpretation would be acceptable. As an additional observation, the regulations are explicit in the situation where the participant does not make the missed payment by the end of the "cure period" and the loan is labeled a "deemed distribution" The regulations explicitly state that the amount of the "deemed distribution" is the amount of the outstanding balance with interest applied until the end of the "cure period". I am interested in hearing how other companies are handling the situation.

[R. Butler]

We accrue the interest. I am unaware of any basis not to accrue interest.