Are today's companies concerned about employees taking loans from workplace retirement plans?

May 20, 2017

According to Alight Solutions 2017 Hot Topics in Retirement & Wellbeing survey, nearly eight out of 10 (79%) companies that offer this plan option are somewhat or very concerned about their employees taking loans from their workplace retirement plans - and many companies are taking steps to help employees pay off existing loans and avoid taking future loans from their plans.

How concerned is your organization about loan usage in the plan?


 

What action is your organization likely to take with respect to plan loans?

  Completed Recently Very likely to take action* Moderately likely to take action Not at all likely to take action
Allow terminated participants to continue loan repayments (via direct debit or other method) 44% 12% 22% 66%
Implement a waiting period between a loan payoff date and a new loan origination 28% 10% 24% 66%
Reduce the number of loans available 13% 11% 13% 76%
Study demographic data on the participants taking loans 9% 27% 45% 28%
Target communications to those taking out a loan or who have a loan outstanding 7% 22% 46% 32%
Reduce the amount of balance eligible for loans (e.g. restrict to employee deferrals only) 7% 5% 12% 83%
Increase loan organization fees 7% 5% 13% 82%
Increase education on the impact of loans on retirement income 5% 46% 44% 10%
Collect data on the underlying reasons participants are taking loans 5% 8% 36% 56%
Require participants requesting a loan to speak with a financial counselor prior to loan approval 1% 5% 20% 75%

*Percentages are among companies that have already taken action

 

To benchmark your offerings against those of other companies, download 2017 Hot Topics in Retirement and Financial Wellbeing.

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