403(b) loans

[Felicia]

Can a person take a loan from a 403(B) plan if the plan only has salary deferral money? Cites would be helpful.

[Ellie Lowder]

Loans from 403(B) elective deferral plans are permitted, provided that the 403(B) account includes a loan provision. In a non-ERISA plan, the participant requests the loan. Loan Code Section is 72(p). There are also proposed regulations - and the IRS has finalization of those on their business plan list for 2000.

[Ellie Lowder]

Loans from 403(B) elective deferral plans are permitted, provided that the 403(B) account includes a loan provision. In a non-ERISA plan, the participant requests the loan. Loan Code Section is 72(p). There are also proposed regulations - and the IRS has finalization of those on their business plan list for 2000.

[MWeddell]

Often loans may be available on a more favorable basis from a salary-deferral only 403(B) plan. That type of plan is unlikely to be subject to ERISA and hence the DOL loan regulations don't apply.

For example, a participant with a $10,000 balance might be able to borrow the whole $10,000 in a non-ERISA plan but probably will be restricted to only $5,000 in an ERISA plan.