Two Plans - Loan Limit Question

[L_Ann_F]

The plan sponsor has two plans, a money purchase plan & a 401K plan. The employee is a participant in both plans. Each plan allows for loans and the limit of each plan is one loan at a time.

I understand that the $50,000 limit applies to both plans being treated as a single plan. Participant can only take a loan of $50,000 combined from both plans (not $50,000 from each of the two plans totaling $100,000).

Since each plan only allows for one loan at a time, would both plans be treated as a single plan limiting the number of loans to one total from both plans?

[ETA Consulting LLC]

No; a loan may be received from each plan. The regulations do not provide that one plan's loan provisions (i.e. one loan at a time) applies to all plans. Therefore, each plan has its own provisions allowing for one loan.

Good Luck!

[L_Ann_F]

Thank you