Ready for a “Mind Blowing Conversation” about 401(k) Loan Programs?
401(k) Fridays Podcast
Could retirement plan loans be the next big fiduciary concern for plan sponsors? Multiple regulators are taking a harder look at the retirement plan loans, especially defaults. In this just released and fascinating podcast, Bruce Ashton, ERISA Attorney and Partner, Drinker Biddle, tells 401(k) Fridays host Rick Unser that plan sponsors need to pay more attention to their loan programs, especially if their plan is experiencing defaults.
Indeed, retirement savings are leaking out of plans prematurely due to significantly high 401(k) loan default rates, especially when employees are involuntarily separated. For plan sponsors who may respond to this by saying “So what? Employees are borrowing their own money” … Ashton provides some very enlightening commentary. So enlightening that host Rick Unser called it “mind blowing.”
Bottom line: Administering a loan program is a fiduciary obligation, according to Ashton. If your plan is experiencing loan defaults, this ERISA Attorney says you need to pay more attention to your loan program than you think.
Have a listen; you’ll be glad you did!