Retirement Loan Eraser ("RLE") prevents 401(k) loan defaults and associated cash outs. With RLE protection, you can "Keep Your Balance" and your retirement dreams alive. Ask your plan recordkeeper about RLE.

1. Spring 2016

2. 2 RETIREMENT LOAN ERASER
86% of loans default upon job loss.
Par3cipants do not have the liquidity or
income to repay their loans.
Source: February 2014 Wharton/Vanguard study
$7 billion in loans default annually
exclusive of associated cash outs.
20% of par3cipants have outstanding loans.
40% of par3cipants take loans over a 5 year period.
The Problem

3. 3 RETIREMENT LOAN ERASER
The SoluGon ... ReGrement Loan Eraser
§ Re3rement Loan Eraser (“RLE”)
prevents cash outs caused by
loan defaults
§ Reduces fiduciary exposure
ERISA 29 CFR 2550.408b-1(d)(vii) require a
plan to adopt "steps that will be taken to
preserve plan assets in the event of such
(loan) default.”

4. 4 RETIREMENT LOAN ERASER
Benefits of ReGrement Loan Eraser
§ Prevents loan defaults and associated cash outs
§ Improves re3rement outcomes
§ Easy to implement
§ Works on exis3ng plaMorms
§ No cost to plan/paid by borrowers via aQer-tax
payroll deduc3on
§ Solves for ERISA, tax and fiduciary issues

5. 5 RETIREMENT LOAN ERASER
Process at a glance
Loan default and cash
out is prevented.
Account balance is
restored with cash.
4
ParGcipant misses
loan payment aQer
job loss.
3
Loan and RLE
payments
begin.
2
ParGcipant borrows
and elects RLE
coverage.
1
How ReGrement Loan Eraser Works

6. 6 RETIREMENT LOAN ERASER
Compliance-Friendly
§ Loan is repaid before default – no 1099 or
tax penalty required
§ No plan or policy amendments needed,
seYlor func3on only
§ Cost of protec3on is an affordable fee via
aQer-tax payroll deduc3on
§ No change of tax status in par3cipant’s
account
§ Reduces employer exposure on IRS plan
audit
1099

7. 7 RETIREMENT LOAN ERASER
§ Sally, a 30 year old parGcipant
§ Takes a loan to pay unreimbursed medical expenses
§ $4,600 median loan amount
§ Sally is disabled and loses her job. She hopes to reGre at 65.
Year
Case Study
For hypothetical purposes only.
Assumes a 6.5% return on your
retirement account, current age of
30 years, retirement age of 65
years and income tax rate of 25%.
Not adjusted for inflation.
Value of RLE Protected Loan With No Cash Out
Projected retirement
account balance
$0
$10,000
$20,000
$30,000
$40,000
$50,000
$60,000
2017 2020 2025 2030 2035 2040 2045 2050 2055
$5,836
$7,049
$9,658
$13,232
$18,130
$24,839
$34,032
$46,626
$52,885
$264,425

8. 8 RETIREMENT LOAN ERASER
Learn More
§ Contact Eric Weber at Custodia
o 415-902-8964
o eweber@custodiafinancial.com
Keep Your Balance!