Many plan sponsors make plan loans available in the hopes that they will make employees more comfortable about saving. After all, doesn’t it seem more appealing to put away money if you know you retain access to it?

Of course, once loans are made available – and once the same employees take them over and over, using the retirement plan like a savings account – many plan sponsors experience a different hope: that employees will use the plan loan feature less frequently. Although we hesitate to tell a participant “you should take a loan” or “you shouldn’t take a loan”, the best approach is to ensure participants receive clear and full education regarding the implications of plan loans.

Last week CNN Money ran an article detailing four reasons participants should not take plan loans. The linked article might be helpful for human resources professionals who are seeking to become better educated regarding loans and more equipped to answer participants’ questions. In addition, if you receive participant education from advisors at QPA and would like for your participants to receive additional information regarding loans, please let your advisors know. There is an art to providing the necessary amount of education, without providing definitive advice.

Matt Eickman

Matt Eickman

Full Bio

Matthew loves to write. He also loves to think, though he’s probably a better writer than a thinker. He does not like to be on camera or in videos. This blog will allow him to write, challenge his ability to think, and, from time to time, test him with video blog entries.

He has a unique blend of legal and practical experience that helps us to serve our clients well. On the one hand, he has more than 12 years of private legal practice experience focusing exclusively on employee benefits, including time as a partner in an employee benefits boutique where he has represented clients in front of the DOL and IRS. On the other hand, he holds his FINRA Series 7 and 66 registrations and serves as the Director of ERISA Services for Qualified Plan Advisors.

Matthew likes to stay active. He provides fiduciary training, Investment Policy Statement design, and vendor oversight to our clients. He is an active member of the Employee Benefits Committee of the American Bar Association Tax Section, serving as Chair of the Defined Contribution Plans Subcommittee. He also has been appointed to the IRS TE/GE Gulf States Council and is a frequent speaker on regulatory developments, fiduciary responsibilities, and retirement readiness.

Most importantly, he stays active with his family. His wife, Laura, is the founder of REbeL, Inc., a not-for-profit organization. His three young boys are mixed up in far too many sports, and they enjoy traveling, watching college football, running with Dad, and rooting for the Huskers.
Matt Eickman
Share This