Question: An employee asked for a loan from his 401(k) to pay for some emergency medical expenses. We currently don’t have a loan program set up through our plan. Are we legally required to give him the money anyway?

A: There’s no requirement for a 401(k) plan administrator to offer loans to participants, said IRS in a letter from the Office of Chief Counsel. Under Sec. 72(p)(2) of the Internal Revenue Code, plans are permitted to offer loans to participants of up to half the funds in their account for five…

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