Why is ERISA attorney Thomas Schendt so passionate about stopping retirement plan leakage? Because 401(k) loan defaults and a misunderstanding of plan sponsor requirements are costing plans billions every year. See why he believes this problem has a simple solution.

1. Preven&ng Loan Defaults, Protec&ng Fiduciaries
February 28, 2017

2. 2 RETIREMENT LOAN ERASER
Speaker: Thomas G. Schendt, AHorney
§ Partner, Alston & Bird, LLP, Washington, D.C.
§ Specializes in Employee Benefits and ERISA

3. 3 RETIREMENT LOAN ERASER
Two words: Re6rement Leakage
§ Limited awareness by plan sponsors on the magnitude of the
problem
§ The very real fiduciary risk … going unacknowledged
§ The impact on parKcipants’ reKrement outcomes and financial
wellness
The Why … And Why We Care
As an industry, why talk about the problem when we
can solve it?

4. 4 RETIREMENT LOAN ERASER
Taxes
Penal6es
Lost Earnings
Cash Outs
The Tip of The Iceberg
Only 8% of loan defaults are reported
on Form 5500
Loan Defaults People See
The True Problem
Lost re6rement savings up
to $20 - 30 billion a year

5. 5 RETIREMENT LOAN ERASER
1. Managing risk
2. Increasing plan effecKveness
3. Avoiding a noncompliance surprise
Top Plan Sponsor Concerns for 2017
Source: Annual Defined Contribu&on Benchmarking Survey, DeloiHe, Interna&onal Founda&on of Benefit Plans,
2015
What Plan Sponsors Say
§ 83% want to improve the reKrement readiness of acKve
parKcipants
§ 77% want to reduce plan risk and potenKal fiduciary
responsibility
Source: Willis Towers Watson, January 11, 2017

6. 8 RETIREMENT LOAN ERASER
Sponsors Must Take Affirma&ve Ac&on
§ Approving a loan is a fiduciary funcKon
§ Required steps to preserve plan assets
§ Using account balance as “adequate security” actually
diminishes plan assets
No longer an obscure ERISA requirement
ERISA 29 CFR 2550.408b-1(d)(vii) requires a plan to adopt
"steps that will be taken to preserve plan assets in the event of
such (loan) default.”

7. 9 RETIREMENT LOAN ERASER
Loan Defaults Invi&ng AHen&on of Auditors
“Simply put, the greater the number of
defaults, the greater the likelihood of audit.”
- PLANSPONSOR, June, 2016
§ Auditors are looking under the “plan hood.”
§ Determining if plan sponsors have
adequate procedures for loan defaults and
are taking affirmaKve steps.

8. 10 RETIREMENT LOAN ERASER
Though`ul Innova&on Advances The Industry
§ Loan protecKon prevents defaults,
reduces fiduciary risk and improves
reKrement outcomes
§ Let’s work together on this issue

9. 11 RETIREMENT LOAN ERASER
844-SAFE-RLE
www.loaneraser.com