Bank of America’s newest survey shows that at the end of 2022, fewer participants took hardship withdrawals and loans.
Participants taking a hardship distribution declined in the fourth quarter of 2022, with the average at 0.4%, down from 0.5% in the third quarter. Also, the average hardship amount also declined in the fourth quarter from the third by 8%.
For loans, the fourth quarter data shows that 60,789 participants borrowed from their workplace plan, which was a decline of 12% from the third quarter. However, loan defaults rose slightly to 15.9%, up from 15.7% in the third quarter and totaling more than $450 million.
Despite the. good news, the average plan participant contribution rate dropped slightly from 6.6% at the end of 2021 to 6.4% at the end of 2022.