Once a match is added to a plan, both participation and deferral rates rise significantly. But note that the matching percentage should be carefully chosen. Participation and deferrals generally drop if an employer decreases a matching percentage. Choices Beyond A Straight Fixed Match A fixed match on each contribution dollar isn't the only viable matching strategy.
Younger employees are usually concerned about access to their account savings before retirement.
With a loan program, participants effectively borrow from themselves because all of the loan's interest and principal payments are credited back to each borrower's plan account. In a typical loan program, the employee begins the loan process by completing a loan application for the plan administrator's approval. The approval guidelines that the plan administrator follows must protect the plan assets and be uniform for all loan applicants. The plan's recordkeeper receives the loan information after it's approved. The recordkeeper then records the loan, establishes a repayment schedule, and lets the plan trustee or custodian release the loan proceeds.