principal only share release

[Guest ladycpa2]

Here's a fun one. We took over a plan in which 2 prior TPAs appear to have done the share release incorrectly and based it on principal only when the exempt loan was for longer than 10 years. The problem is that this started back in 1993. There are other allocation corrections that need to be done so we are starting over anyway and revising the allocations for years 1993-2006. Does anyone know if 54.4975-7(b) allowed for the use of principal only share release when the loan was longer than 10 years back in 1993? I don't see anything in the history of that section and regulation that would allow but wanted to make sure I wasn't missing anything.

THANKS!

[BeckyMiller]

Nope - the principal only method restriction on term at 10 years was in the original ESOP regulations which came out in final form in the late 1970s - I think it was 1977, but might have been 1978.