multiple plan loan limit

[Guest padmin]

Employer sponsors both a 403(b) and profit sharing plan. Balances are as follows:

403(b) 19,000

profit shairng 1,000

total 20,000

It seems as though the participant can take a 10,000 loan from the 403(b) even though that will exceed 50% of the balance in that plan. Is this correct, how do we assign the extra 1,000 as security?

Any help would be appreciated

[ETA Consulting LLC]

Under 72(p) yes. However, under the written plan terms (probably not). While 72(p) allows for a $10,000 loan when the vested balance isn't 10K, additional security must be picked up from outside the plan (where the $1,000 from the other plan would not appear to maintain the prohibited transaction exemption).

Hence, each plan is likely restricted (under plan terms) to a limit of 50% of the vested account balance in that plan.

Good Luck!