How is America Doing?

According to Vanguard's "How America Saves", plan loans increased slightly in 2023. They went from 2.8% to 3.6%. 13% of plan participants had a loan outstanding and the average loan was $10,700. With Plan Sponsors continually looking to improve plan utilization, the new SECURE 2.0 provisions that allow for PLESAs (plan linked emergency savings accounts) aren't quite ready for prime time yet.

As recordkeepers work through the expanded capabilities required to add this provision, guidance is also needed regarding the ins and outs of making this available to employees. If loan & hardship use is up at your company, a thorough analysis of the educational tools available to employees & the plan design options is critical.