A large spike in unemployment leads to an increase in withdrawals from retirement savings. Sponsors should take action now to preserve retirement security.
When large companies announce layoffs, what is often missed in the news is the true cost of 401k loan defaults by those employees affected.
Over the past two years, plan sponsor and defined contribution industry focus on leakage of participant assets out of the qualified plan environment has increased dramatically
The U.S. may have just reached the longest economic expansion on record, but the news underneath the headline numbers is not all about growth.
This year, we’ve seen some evidence that, after a period of uptick during and after the financial crisis, loan activity in 401(k) plans has subsided slightly in what has been a very strong economy. Just last week, Fidelity reported that 20.1% of participants have loans outstanding, down from a peak of 22.6% in 2013. Earlier this year, T. Rowe Price reported that 22.5% of participants have loans outstanding.
On July 31, we worked with Employee Benefits News on an educational webcast, “Is Your Loan Program Getting in the Way of Financial Wellness?” There’s a very strong link between plan loans and financial wellness.
In their latest “How America Saves” report, Vanguard highlights that only 4% of participants terminating with an outstanding loan are using ACH repayment. Some in the industry are citing extended repayment as a way to prevent loan defaults—but this minimal uptake suggests limited impact.
RLE is scaling new heights and spreading the good word about 401(k) loan protection in other parts of the world! This week our Chief Technology Officer John Steinmeyer and his son John climbed to base camp at Mount Everest. They are tired but proud!
Increase Your Plan Leakage IQ
If you are concerned about plan risk, you are not alone. According to Deloitte’s Annual DC Benchmarking Survey, what % of plan sponsors are concerned about 401(k) plan risk and fiduciary exposure? A. 77% B. 24% C. 63%. The correct answer is … A. According to the Annual Defined Contribution Benchmarking Survey from Deloitte and […]
