401(k) loan defaults (and related cash outs) were a hot topic at the recent SPARK Forum in Palm Beach. Conference attendees heard about the ERISA requirement for plan sponsors to preserve assets intended for retirement and how that specifically applies to loan defaults.
In their session “Future Shock: The Retirement Loan Default Crisis,” Tom Schendt, Partner, Alston & Bird and Tod Ruble, CEO, Custodia Financial, shared how a participant loan program that automatically diminishes a participant’s account balance following default, or where collections rarely yield a result, might not be considered effective when the default is involuntary. Enter Retirement Loan Eraser, a breakthrough solution that prevents loan defaults in the first place. Read Tom’s groundbreaking new editorial on loan defaults here.