Loan from Rollover before becoming participant?

Plan allows for rollovers in for employees expected to become a participant but who haven't met the requirements yet.

Are these people "Participants" when it comes to the availability of a Participant loan?

Definition of a participant is:

Quote

Any current Employee who met the applicable eligibility requirements and reached his or her Entry Date and, where the context so requires, pursuant to the terms of the Plan, any living former Employee on whose behalf an Account is maintained or former Employee who has met the eligibility requirements.

To me, neither of this conditions have been met.

I agree

I agree as well and I recently came across this issue -  EOB I believe. As an aside, I was counting them as a participant on the 5500 because they had an account balance.  I think I wasn’t counting them as an active participant though...Not sure if that was correct 

Do you remember where in the EOB?  Which topic?

Can’t recall - I do see in Rev Rul 96-48 it talks about employees as eligible to make pre-participation rollovers are referred to as limited participants for purpose of the rollover only.

I would read the plan document - ours says that they are a participant for purposes of their rollover account only, and specifically addresses loans from rollover accounts for limited participants. Our doc allows them (assuming the plan allows loans) unless a limitation on such has been written into the adoption agreement (there is a specific spot available to do so). 

Read the plan document??  Man - who wants to do that??

This language is in the Corbel Document

7.6 LOANS TO PARTICIPANTS ....For purposes of this Section, the term Participant shall include any Eligible Employee who is not yet a Participant, if, pursuant to the Adoption Agreement, "rollovers" are permitted to be accepted from Eligible Employees.

I think in absence of specific plan language, the plan administrator could interpret it either way.  You would probably want to clarify it in the plan loan policy.