Loans from safe harbor matching contributions

[Guest ATTY]

Can a participant in a (basic matching) safe harbor 401(k) plan take a loan from those safe harbor contributions? I haven't seen any guidance prohibiting it.

On a related note, has anyone ever seen any commentary on the wisdom of allowing participants to take a loan from their elective deferrals? I realize many plans allow it, but it seems like a loan default in this circumstance (i.e., a deemed distribution) would technically violate 401(k)(10). Any thoughts are appreciated.

[QDROphile]

That's why it is called a "deemed distribution." Nothing is distributed if the participant is ineligible for a distribution. Contrast with an offset distribution, where the loan is actually distributed.