Time to Eliminate Loans in 401(k) Plans?: Balancing Fiduciary Risk, Retirement Outcomes and Employee Perceptions

Could retirement plan loans be the next big fiduciary concern for plan sponsors?  Hard to tell, but my conversation today with Bruce Ashton, ERISA Attorney and Partner in the Employee Benefits and Executive Compensation Practice at Drinker Biddle, will certainly help you understand why multiple regulators are taking a harder look at the retirement plan loans, especially defaults.  We cover a ton of ground including my opening question which is likely the first thing that would come to the minds of most employers, we delve into how loans become a fiduciary concern and much more.  I also ask Bruce the inevitable question of whether the time has come to eliminate loans in workplace retirement plans.  

Before we get started, don’t forget that we have bonus question on the website, a full transcript of the episode, a copy of the white paper Bruce authored on the loan challenges we discuss today and much more. You can find it by going to 401kfridays.com/ashton.  

Guest Bio

Bruce L. Ashton has more than 35 years of experience handling employee benefits matters. His practice concentrates on representing plan service providers (including RIAs, independent record-keepers, third-party administrators, broker-dealers and insurance companies) in fulfilling their obligations under ERISA. His experience includes representing public and private sector plans and their sponsors, negotiating the resolution of plan qualification issues under IRS remedial correction programs, advising and defending fiduciaries on their obligations and liabilities, and structuring qualified plans, non-qualified deferred compensation arrangements.

Combining his employee benefits and transactional experience, Bruce is also active in the installation and funding of employee stock ownership plans (ESOPs).

Bruce is a contributor to Drinker Biddle’s Broker-Dealer Law Blog, which provides practical insights on litigation, regulatory, compliance and fiduciary issues impacting broker-dealers. He has co-authored four books on employee benefits issues and a quarterly column in the Journal of Pension Benefits on IRS remedial programs, and is a frequent contributor to various tax and pension publications. He is a frequent speaker on employee benefits issues ranging from fiduciary responsibility to ESOPs, and is a regularly featured speaker at conferences sponsored by ASPPA, and other organizations.

Struggling with a fiduciary issue, looking for strategies to improve employee retirement outcomes or curious about the impact of current events on your retirement plan? We've had conversations with retirement industry leaders to address these and other relevant topics! You can easily explore over 150 prior on-demand audio interviews here. Don't forget to subscribe as we release a new episode each Friday!