Loan limits

[Guest Sieve]

Stupid question, I assume, but I'll ask anyway (because I thought I knew the answer, but I'm now not so sure).

Is the $50,000 maximum a per plan limit, or a per participant limit?

Examples:

• Can an individual borrow the $50,000 maximuim from each of 2 different plans of an employer (i.e,., psp & mppp), without considering the amount borrowed form the other plan (assuming the account balalnces support that much)?
  
• What if one plan of the employer is a PSP and the other is another PSP?
  
• What if the plans are from 2 different employers?
  

[PensionPro]

All plans of the employer are treated as a single plan to determine the nontaxable loan limit. "The employer" includes related employers. However, the DOL regulations do not aggregate plans in applying the adequate security rules. See IRC §72(p)(4), DOL Reg. §2550.408b-1(f).

[Guest Sieve]

Thanks, PensionPro. I think I found the cite for the conclusion in your 1st & 2nd sentences: Treas. Reg. Section 1.72(p)-1 (paragraph before Q&A-1).

It appears, therefore, that a participant can take the maximum loan from multiple plans if each is a plan of an unrelated employer. Does anyone disagree with this conclusion?

[PensionPro]

I don't disagree with your conclusion. I meant to cite IRC § 72(p)(2)(D).

72(p)(2)(D) RELATED EMPLOYERS AND RELATED PLANS. --For purposes of this paragraph --

(i) the rules of subsections (b), ©, and (m) of section 414 shall apply, and

(ii) all plans of an employer (determined after the application of such subsections) shall be treated as 1 plan.

[Guest Sieve]

Thanks for the cite.