I posted a little while ago, but can someone please describe the loan requirement rules for 1/2 of the vested account balance? Plan allows multiple loans - participant took out a small loan a couple of years ago and wants to take out another. His account balance includes the remaining loan balance that needs to be repaid. Do I calculate 1/2 of his total vested account balance by adding the remaining balance of the original loan to his account balance - then figure out 1/2 of that balance and that is the total loan he can have outstanding (including 1st loan and loan he will take). Thank you.

The outstanding loan balance is added to determine a total account balance. You then take 1/2 of that. From that amount you subtract the outstanding loan balance and that gives you an amount that could theoretically be borrowed. However, you have to be careful with the new regs for 72P and replacement loan issues. Let me know if you need an example.

You also have to take in consideration any principal outstanding in the past 12 months. Generally, though, this doesn't come into play, unless the acct balance is over $100k.