Can anyone please offer me guidance if a 457 plan can allow for loans?

Can you tell me if there are any rulings from the IRS on this topic and if so, where I could locate them?

Thank You

Governmental 457 plans, which now must be funded, can allow loans - this was a change made by the ? Act (the one that required governmental 457 plans to be funded).

I don't think there has been any guidance on how to set the loan procedure up. Not subject to ERISA - is it subject to Code ss 72(p)? You'd probably be ok if you set it up under the qualified plan loan parameters (this is a guess).

I think you're on your own on this one.

I don't believe many people are using the loan provisions for a 457 plan. The statutory support is rather weak, and the IRS does not appear ready to issue guidance in that area.

While the legislative authority is somewhat weak other than the conference report statement that loans will be permitted, the IRC 72(p) proposed loan regs do state that nonqualified plans of State and local governments can offer loan programs. Prop. Reg Section 1.72(p)-1 Q&A #2(d). So the issue is further muddied since other IRS 457 staff have continued to state that offering loans is questionable. They have also stated informally that if they ultimately rule that loans are not permitted, it will enforce only prospectively.