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401(k) Loan Defaults: How Big Is the Leakage and What Can Policymakers Do to Preserve Americans' Nest Eggs? (PDF)
Navigant Economics and The Brookings Institution July 16, 2012
"Americans have been increasingly borrowing against 401(k) plans during the recent economic downturn. Unfortunately, many of those borrowers are unable to repay their 401(k) loans due to job loss or disability. They estimate that the amount of 'leakage' from retirement accounts caused by involuntary defaults on 401(k) loans could be as high as $37 billion annually. To address this growing problem, the authors advocate that the default rule in a sponsor's plan provide insurance via auto-enrollment with an opt out to participants who borrow against a 401(k) account."
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