"Can a plan loan policy have a provision that per diem employees are not eligible to take a loan? I've got a plan where they often move employees to per diem (I don't know the mechanisms or legality behind that, but let's assume it's kosher), so participants who are still considered active will want to access their money. So they take a loan.... and then don't work again for three months, so the loan gets behind and eventually far enough behind to need to be defaulted. Defaulting a loan is a process, and something that no one wants to deal with. Plus, there's the question of was it really a valid loan in the first place ... if the Loan Administrator know that it couldn't be paid back through regular payroll deductions. Maybe it was a fiduciary breach by the plan sponsor, maybe it was an intent to get around the distribution rules by the participant.... My gut reaction is no, but then is it OK for the plan administrator to continually deny loans to per diem employees and therefore create a de facto exclusion? [If it matters, we are in New York State, where participants have the right to request that their loan stop being paid through payroll deduction, regardless of what the loan policy says. This is not something that we recommend our clients make known.]"