Loan and subsequent withdrawal- balance leave only loan

[jane123]

Participant’s balance is $20,000

Participant receive loan of $10,000 on the last 30 days.

Balance in account is now $20,000, with loan balance of $10,000 included in the $20,000 balance.

Participant now wants an in-service withdrawal of $10,000, leaving only $10,000 loan in account.

Is this permissible?

Thanks very much

[FundeK]

If your plan allows in-service, then yes it is allowed. The account balance only needs to be used as security at the time of the origination of the loan, not throughout the entire life of the loan.

[Appleby]

See IRC § 72(p)(2)(A) and DOL Reg § 2550.408b-1(f)(2)