As part of the partnership, Custodia’s Retirement Loan Eraser program will be made available to TSA clients, representing more than 1,800 plans and 800,000 participants. Retirement Loan Eraser is a guaranteed loan protection program that insulates retirement plan accounts from leakage. This is done by making monthly loan payments and repaying the outstanding loan balance upon the borrower’s death, permanent disability or involuntary job loss.
According to Custodia, this additional employee benefit comes at no cost to the plan sponsor and, combined with clearer loan disclosures, will aid participants in making better decisions about their retirement futures. The Retirement Loan Eraser program can be implemented without changes to the operational protocols or systems of plans and administrators.
“Involuntary 403(b) and 457(b) loan defaults are an unnecessary, preventable crisis hitting families that are just looking to make ends meet. This is an important step towards creating an industry standard practice that guarantees protection to borrowers taking emergency loans,” says Tod Ruble, CEO of Custodia Financial.
Joe Rollins, president and CEO of TSA Consulting, adds, “Collaborating with Custodia will allow us to better serve the needs of our clients by offering an important tool to protect our plans’ participants from retirement leakage.”
The Dallas-based Custodia Financial is a provider of programs to prevent loan defaults with 401(k) and other defined contribution plans. The Florida-based TSA Consulting Group, Inc. provides compliance and administrative services to 403(b) and 457(b) retirement plans maintained by public education employers.