Do you check total of all outstanding loan balances when checking spou

[John A]

Participant has an outstanding loan balance of $4,000 and wants to take a second loan of $1,500 - is spousal consent required for the loan? Would spousal consent be required if the second loan was $1,000?

[Alf]

If the plan is subject to the QJSA rules, spousal consent should be required for a loan of any amount, shouldn't it. The $5,000 exception is only measured in terms of account balances at the time of a distribution/withdrawal, not the amount of the distribution/withdrawal.

[John A]

Alf,

From 1.401(a)-20:

Spousal consent is not required if the plan or the participant is not subject to section 401(a)(11) at the time the accrued benefit is used as security, or if the

total accrued benefit subject to the security is not in excess of $3,500.

I believe the $3,500 has been increased to $5,000, but the idea is the same - spousal consent is based at least partially on the total accrued benefit subject to the security, not the total accrued benefit. The question is whether the total accrued benefit subject to the security is based on all outstanding loans.

I do agree with your comment in all non-loan situations.