Eliminating Loan Program to Allow Hardship One Year Amending to Allow Loans the Next Year

[Guest 2stressed]

Does anyone see a problem with a Plan Sponsor who amended his plan last year to remove loans (to allow one participant to take a hardship distribution) amending the plan this year to allow loans (because he wants one)?

[rcline46]

First, he got bad advice.

Second, I hope it was not an HCE that got hardship

Third, assuming Second is not a problem, he can amend back in.

What was wrong with denying the loan, so that all available loans were taken and then giving the hardship?