if a plan is amended to no longer provide for participant loans, what happens to loans outstanding at the time of the amendment? Do they become due and payable as of the date of the amendment or does the participant just keep paying as usual until paid off?

I suppose an amendment eliminating plan loan provisions ideally would say "effective X/X/XXXX, except for loans outstanding on that date" -- but arguably that's not needed because the promissory note is basically a contract, setting forth the lender's rights and the borrower's obligations. That contract isn't affected merely because one party decides to change it without the consent of the other party; no amendment to the plan could expressly force the borrower to repay the loan immediately, so I don't think an amendment that merely removes loan provisions would have that effect.

I agree with Dave Baker's analysis in the previous message, however, many loan documents provide that the loan is payable on demand. In that case, it would be possible to demand payment in full on the loan. Unless there are powerfull countervailing reasons, demanding payment seems very undesirable in light of the employee relations problems it would cause.

Dave & Wessex: I agree with your comments......that was my opinion, too, but it's always nice to see others in agreement! Thanks