A plan sponsor borrows $100,000 from the plan. The loan, plus a reasonable rate of interest, is repaid within 90 days. Consider the following statement: The loan is a prohibited transaction.Is the above statement true or false?

Question

Quizplus · Accepted Answer

Under ERISA and the Internal Revenue Code, loans from a plan to a plan sponsor are generally considered prohibited transactions, regardless of the repayment terms or interest rates.

A Plan Sponsor Borrows $100,000 from the Plan