Your participants should stay the course

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With participants being allowed to get a Coronavirus related distribution under the plan if they were affected by it and if your plan offers it, keep in mind what it might do with their retirement savings.


Accessing retirement plan assets for today’s needs is what I call leakage and leakage isn’t good for your plan (as it depletes assets and pricing depends on assets) and it’s certainly not good for your employees.


While people certainly have needs, the other problem besides invading retirement plan assets for today’s needs is that the market has gone south as well. Taking out retirement plan assets when the market has gone down 20-30% is even worse. Try communicating with participants about the issues surrounding using retirement plan assets today and if they can avoid it, avoid it. If they can’t, at least you had the discussion.

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