Each year you should spend some time evaluating the providers who work with your 401k plan. Assessing the performance of your 401k investment advisor is often the most difficult since he/she may be the captain of your 401k provider team. How can you tell if your 401k investment advisor is doing a good job?
A significant factor in helping your 401k plan participants achieve retirement readiness is protecting them from themselves. In other words, helping participants avoid making bad decisions. An important component of that process is minimizing the loss of participant account balances from loan defaults.
Also called leakage, defaulted loan balances are typically removed from participant retirement accounts forever. This account leakage can be reduced by a well-designed 401k loan program. A state-of-the-art 401k loan program has the following characteristics: