Employer loses 501(c)(3) status

[nancy]

We have a 403(b) plan that is sponsored by a hospital. They were recently notified by the IRS that their 501©(3) status is being revoked. It appears that under IRC 1.403(b)-10(a)(2) that they can amend the plan to discontinue contributions and "freeze" the plan. If this is the decision they make, can participant loan payments still be made to the plan? Can new loans be made to participants? Alternatively, the plan could be terminated and all the loans would become taxable.

[Ron Snyder]

They could now adopt a 401(k) and allow employees to roll. Then new loans could be made and none of the existing loans would necessarily become taxable.