Infographic: 10 steps employers can take to curb 401(k) loans Share 10 steps employers can take to curb 401(k) loans Loans from 401(k) plans can undermine retirement savings for workers. Here are 10 steps employers can take to help decrease 401(k) plan leakage. 1. Get to the root of the issue Educate and reinforce budgeting behaviors all year long. 2. Limit the number of loans available When plans allow for multiple loans, most loan users have more than one outstanding loan1. 3. Know your people Listen to your employees and evaluate your benefits lineup to ensure you’re providing benefits that workers want. 4. Add a loan waiting period Waiting periods can help workers break the cycle of back-to-back loans against their accounts. 5. Look inside and outside In cases of workers’ credit card or medical debt, cross-promote benefits features that you offer, such as credit counseling and health savings accounts. 6. Add low-cost loan options outside the plan Send the message that the 401(k) plan should be earmarked for retirement by giving access to low cost loan providers that can help pay for emergency bills. 7. Make it more personal Targeted, timely messaging during the loan transaction process can make the employee pause one last time and consider other options before electing a loan. 8. Allow terminated employees to repay their loan Two-thirds of plans allow terminated employees to repay their loan and avoid hefty tax penalties2. 9. Roll out the welcome mat Take the opportunity to communicate loan repayment requirements with your newest employees to help them start off on the right financial foot. 10. Reduce the balance eligible for loans This limits the amount of loan balances and therefore potential leakage from the plan. It also conveys to workers that the employer contribution is for retirement purposes. For more insights on the 10 steps employers can take, download the PDF. Download PDF