loan regulation

Plan leakage can be the result of participants terminating with outstanding loan balances. This leads to an important question for plan fiduciaries.  If a participant is going to be terminated involuntarily due to a reduction in workforce or poor job performance, and the participant applies for a loan, should the loan be granted?  Based on the content of the article we’ve attached, the fiduciaries of the plan could create a fiduciary breach by granting the loan to the participant.