Please find all available Research Articles below:

Let’s Try a Modern Approach to Plan Loans

"Let's Try a Modern Approach to Plan Loans," Stephen M. Saxon, Esq., Plan Consultant Magazine, April, 2012. The author of this article, a principal with Groom Law Group in Washington, D.C., explains why participants should be able to use debit cards when accessing automated loan programs."

401(k) Loan Defaults: Who is at Risk and Why?

“401(k) Loan Defaults: Who is at Risk and Why?” December, 2011. This study by a research team with the Financial Literacy Center, a joint center of the RAND Corporation, Dartmouth College, and the Wharton School of the University of Pennsylvania, compares participants who terminated employment and defaulted on their 401(k) loans with those who terminated employment and repaid their loans.

The Availability and Utilization of 401(k) Loans

“The Availability and Utilization of 401(k) Loans,” John Beshears, Stanford University and NBER; James J. Choi, Yale University and NBER; David Laibson, Harvard University and NBER; Brigitte C. Madrian, Harvard University and NBER, May 31, 2011. The authors document the loan provisions in 401(k) savings plans and how participants use 401(k) loans. Although only about 22% of savings plan participants who are allowed to borrow from their 401(k) have such a loan at any given point in time, almost half had used a 401(k) loan over a longer, seven-year horizon.

Plan Sponsor Council of America’s 54th Annual Survey of Profit Sharing and 401(k) Plans

“Plan Sponsor Council of America’s 54th Annual Survey of Profit Sharing and 401(k) Plans.” This survey reports on the 2010 plan-year experience of 820 companies with 10.5 million participants and $691 billion in plan assets. The survey contains 149 tables of data on important industry topics, including: automatic enrollment; company contributions; investment availability and allocation and loans.

An Empirical Analysis of 401(k) Loan Defaults

“An Empirical Analysis of 401(k) Loan Defaults,” Timothy (Jun) Lu, Olivia S. Mitchell and Stephen P. Utkus, November 2010. Many 401(k) pensions allow plan participants access to their pension saving before retirement via a plan loan. This paper investigates the determinants of defaults on such loans, using a rich dataset of over 100,000 participants who terminated employment with a plan loan outstanding.

Borrowing from Yourself: The Determinants of 401(k) Loan Patterns

“Borrowing from Yourself: The Determinants of 401(k) Loan Patterns” Timothy Jun Lu and Olivia S. Mitchell, September, 2010. This paper explores the determinants of people’s decisions to take 401(k) loans. The authors argue that 401(k) plans do not simply represent retirement saving, but they also provide a means of saving for precautionary purposes. Plan characteristics such as the number of loans allowed also influence borrowing and loan size in interesting ways, while loan interest rates have only a small impact.

New Evidence on 401(k) Borrowing and Household Balance Sheets

“New Evidence on 401(k) Borrowing and Household Balance Sheets,” Geng Li and Paul A. Smith, 2009-10. Many loan-eligible households carry relatively expensive consumer debt that could be more economically financed via 401(k) borrowing. Households might utilize 401(k) loans less than expected, due to risk-aversion, self-control problems, and confusion about the potential gains. The authors suggest better financial education to clarify the conditions under which 401(k) borrowing is advantageous and note that allowing households to repay 401(k) loans gradually, even after separation from their employers, could improve household welfare by reducing the risks of 401(k) borrowing.