Top 4 Reasons Plan Fiduciaries Should Protect 401(k) Loans

Your participants’ retirement assets are too important to leave unprotected, and as a plan fiduciary, you have an obligation to preserve that benefit. Consider these top four reasons – straight from the ERISA statutes and the U.S. Code – that support adding a simple loan default solution to your plan, creating a safer fiduciary position:


Straight from the statutes

Top 4 Callout

1 A fiduciary’s primary responsibility is to “provide benefits to the participant.” 1
2 A loan program may only be offered where it will not diminish the retirement benefit of the participant. 2
3 “ . . . participant loans are like other plan investments. . . to which prudence applies requiring periodic performance review.” 3
4 Plan sponsors have an obligation to define “the steps that will be taken to preserve assets in the event of such (loan) default.” 4

Given that 86% of loans default following involuntary termination5, loan protection is a sensible solution providing a more prudent course of action. Retirement Loan Eraser is the only program available that automatically prevents 401(k) loan defaults and measurably improves retirement outcomes.


1 ERISA Sect 404(a)(1)(A)(i)
2 Advisory Opinion 95-17A
3 29 CFR 2550.408b-1(a)(3)
4 29 CFR 2550.408b-1(d)(iv)
5 86% of 401(k) loans default after involuntary termination.  “Borrowing from the Future: 401(k) Plan Loans and Loan Defaults”, Wharton School, University of Pennsylvania, February 2014