Average Deferral Rates Reach 10-Year High of 8.6%
And the use of 401(k) loans fell to a nine-year low of 22.5% in 2018, according to T. Rowe Price’s annual participant data benchmarking report.
Tag: hardship withdrawals
Participants Remained Committed to Their DC Plans During 2018
In the first three quarters of 2018, only 2.2% of participant stopped contributing to their plans, ICI data shows.
Assessing Likely Impacts of IRS Hardship Withdrawal Rule Changes
New rules established by Congress and the IRS simplify the process for participants to request a hardship withdrawal of DC plan assets; some experts say this could increase “leakage,” while others anticipate more positive effects, such as lower debt among cash-strapped participants.
The Importance of Addressing Participant Complaints
If a sponsor does not respond, they could face a civil and/or DOL lawsuit
DC Plan Investors Stayed the Course in the First Nine Months of 2017
Only 2.4% discontinued contributions, a mere 2.8% took withdrawals and just 1.3% took hardship withdrawals, ICI data show
Hardship Withdrawal Changes Included in Budget Deal
Several provisions of the two-year budget bill affect retirement plans.
Loans, Suspended Deferrals Reduce Savings an Average of 14%
The impact is greater for younger investors, as they have a long time horizon for saving, MassMutual finds.
Scant Withdrawals From DC Plans in First Half of Year
The number of participants taking hardship withdrawals remained less than 1%.