A recent report from Aon Hewitt finds that employees' 401(k) plan assets are eroding due to the early withdrawal of money from their employer-provided plan.
About 28 percent of active participants had an outstanding loan against their employer provided 401(k) plan in 2010, according to the Aon Hewitt’s report. This is the highest level since Aon Hewitt began tracking this data. The average balance of the outstanding amount was $7,860, 21% of these participants' total plan assets.
Aon Hewitt’s report of more than 1.8 million employees across more than 110 large plans, examines the three main sources of leakage:
1. Loans taken out and not repaid in full
2. Withdrawals taken during active employment
3. Cashing out retirement savings upon job termination
Click here to access pdf for the full report.