RSI In The News

RolloverSystems Featured in Employee Benefit Plan Review Magazine: Is the Sluggish Economy Harming Your Plan?

Featured guest article written by Jim Langenwalter, chief sales and marketing officer at RolloverSystems.

The effects of the subprime housing crisis are continuing to ripple throughout the U.S. economy. Companies are cutting back on expenditures, laying off workers (240,000 lost jobs in the first three months of this year, according to the U.S. Department of Labor), and in some cases, shutting down for good. With housing prices on the decline in nearly every market and creditors raising loan standards, Americans are feeling the pinch—and tapping into 401(k) accounts to shore up the household bottom line. Those actions are not only detrimental to long-term retirement objectives, they can also negatively impact plan sponsors’ operations.

A recent study shows that nearly 45 percent of workers are cashing out their 401(k) accounts when they change jobs. At the same time, hardship withdrawals are also on the rise, with plan administrators reporting such figures as 17 and 23 percent increases over the past year. Borrowing from retirement accounts is also on the upswing. At the end of 2007, 18 percent of workers had active loans from their plans, up seven percent from 2006...

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