Loan to 10% Partner Still a PT?

[Christine Roberts]

Partner with greater than 10% interest in a p'ship may take out a loan from p'ship qualified plan, per PT exemption under EGTRRA. However, plan is being amended to name individual partners as named Trustees.

Would not loan to partner now constitute a PT, despite the EGTRRA exemption?

[Belgarath]

I'm assuming the partner is a plan participant. If not, then it was, and still is, a prohibited transaction. Assuming he is a participant, then no, there is no prohibited transaction. All participants in a plan are parties in interest. The exemption then applies to all participant loans if they meet the requirements. And as you mentioned, EGTRRA removed this restriction for the partners.

[Christine Roberts]

Answering my own question - no, per DOL Reg. 2550.408b-1(a)(4) - Example (1) (T, trustee of plan P, receives loan on the same terms as other participants - loan not a PT)