401(k) Loan Activity Trends

NAPA Net’s May report indicates that 401(k) participants were slightly less likely to have outstanding loans for year-end 2014 than for 2013.

Between 1996 and 2008, less than one-fifth of participants with access to loans actually had loans outstanding. That amount went up to 21% by year-end 2009 and remained steady through 2013 before falling to 20% by year-end 2014. Loan amounts, however, edged up from $7,421 in 2013 to $7,780 by y/e 2014, based on a report from the Employee Benefit Research Institute (EBRI) and the Investment Company Institute (ICI).

The majority of participants had no outstanding loans at all:

Small plans -- 500 or fewer participants -- had loan ratios of 13% of remaining assets, while plans with over 5,000 participants carried a loan ratio of only 11% (outstanding loans compared with total 401(k) balance).

Participant loan mistakes are common. Our Consultants at QBI can help with taking corrective action should such an event occur.

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