Limit term of loan

[ombskid]

Does the administator of a ps plan have total discretion in the maximum length of a participant loan. Could the only loan in a small plan be limited to 2 years without any specific criteria?

[QDROphile]

Discretion on the part of plan adminstrator over distribution amounts and timing is problematic, so the plan adminstrator should not have discretion over the loan term. The loan term can be limited to less than the statutory maximum under plan terms or loan policies that are the equivalent of plan terms.

[BG5150]

Is there any BRF testing to be done if the max is lowered to, say, 2 years?

For example, a long-time NHCE wants to borrow $20,000. a 2 year loan has payments of 440 twice a month, but over 5 years it's 190. Are there a lot of NHCEs int he plan who could afford the more restrictive time frame?

[ombskid]

One owner - 3 NHCE's. One asking for a loan. 2 of 3 NHCE's make over 100k. Not sure how BRF would be tested