MyPlanLoan provides a value-added service for plan sponsors to offer their participants and simplifies administration of plans offering loans.

Did You Know?

  • Nearly 24% of eligible participants currently have an outstanding retirement plan loan (source: PSCA’s 54th Annual Survey of Profit Sharing and 401(k) Plans, 2010)
  • Participants permitted to take multiple loans are more likely to borrow smaller amounts (source: Lu and Mitchell, 2010)
  • 80% of participants with loans outstanding default after terminating employment (source: Vanguard research, 2007)
  • Companies report up to a 10% increase in plan participation and/or contribution rates when 401(k) plans offer a loan feature (source: Utkus and Yang, 2007)
  • The average outstanding loan balance was $8,619 in 2010 (source: PSCA’s 54th Annual Survey of Profit Sharing and 401(k) Plans, 2010).

How We Help Plan Sponsors

  • Relieves the payroll department of loan administrative work, freeing staff to do other, more profit-generating work for the company
  • Total outsourcing of loan repayments and default counseling through a paperless process
  • Reduces potential errors in setting up or applying manual loan payments
  • Loan limits can be set at below 72(p) limits to ensure that loans are offered prudently
  • Gives HR a compassionate loan continuation benefit for participants, many of whom are involuntarily terminated or terminate for good reason (e.g., Layoffs, Retirement, Disability, Family Care)
  • Provides company with a way to offer participants a benefit that has been proven to help increase plan participation (10% on average, Source: Vanguard research, 2007).

How We Help Participants

  • Provided the terminated participant has a vested account balance of more than $5,000 in the plan, s/he can make loan payments post-employment
  • A viable alternative for terminated participants vs. defaulting on the loan and being subject to significant tax penalties
  • Participants can make accelerated loan payments at any point; they are not limited to the rigid amortization schedule of traditional payroll deduct loans