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Before the summer begins, sponsors should schedule a meeting to illustrate the pitfalls of taking 401(k) loans, she added. In addition, sponsors should reconsider the loan provisions in their plans; advisers can provide them with benchmarking data to help determine the best plan design around this, Golladay said. “I think from a plan sponsor perspective, certainly we would encourage employers to help think of a plan design that would help incent the behaviors that you want,” she added. In the past, employers offered loan provisions to incent employees to participate, but Golladay said automatic features may be incentive enough. “I’m not so sure that [kind of] thinking is as important as it was years ago,” she added.
Before the summer begins, sponsors should schedule a meeting to illustrate the pitfalls of taking 401(k) loans, she added.
In addition, sponsors should reconsider the loan provisions in their plans; advisers can provide them with benchmarking data to help determine the best plan design around this, Golladay said.
“I think from a plan sponsor perspective, certainly we would encourage employers to help think of a plan design that would help incent the behaviors that you want,” she added.
In the past, employers offered loan provisions to incent employees to participate, but Golladay said automatic features may be incentive enough. “I’m not so sure that [kind of] thinking is as important as it was years ago,” she added.
Corie Russelleditors@plansponsor.com