Loan default in Safe Harbor Source

[Guest EPC]

I know that a deemed distribution is not treated the same as an actual distribution for some purposes (i.e. mandatory withholding). However in a Plan that allows loans from a Safe Harbor Non-Elective source, is a deemed distribution precipitated by a loan default treated the same as an actual distribution? Additionally, if the participant in question is under age 59 1/2, is this distribution from the Safe Harbor Non-Elective source a prohibited transaction?

[FundeK]

A deemed distribution is treated as a distribution for tax purposes only. It is not treated as an actual distribution.