ST. PAUL, Minn., and DALLAS, Texas--(BUSINESS WIRE)--Securian Financial and Custodia Financial today announced a new strategic relationship expanding access to Custodia’s Retirement Loan ProtectionSM (RLP) program—a first-of-its-kind, in-plan feature that helps safeguard employees’ retirement savings by automatically protecting 401(k) loans from default when job loss, disability or death occurs.
This collaboration brings together Securian’s financial strength1 and experience in workplace and loan protection insurance with Custodia’s patented Retirement Loan Protection solution, helping to address one of the largest sources of retirement savings loss in the United States.
“Millions of Americans borrow from their 401(k)s with the best of intentions, but job loss or disability can quickly turn a short-term solution into a permanent setback,” said David Seidel, Securian Financial senior vice president and head of its U.S. Affinity Solutions business. “Joining with Custodia Financial in this program reflects Securian’s commitment to innovative protection solutions that help people build secure tomorrows. Retirement Loan Protection helps ensure workers can protect the savings they’ve worked so hard to build—especially when life takes an unexpected turn.”
Protecting retirement savings from a $2 trillion leakage problem
According to industry research, loan defaults and cash-outs account for more than $2 trillion of the U.S. retirement savings gap.2
Many 401(k) participants default on their loans when they leave their jobs because most plans require the loan to be paid upon separation. These defaults can cost the average worker hundreds of thousands of dollars in lost long-term retirement value from missed annual returns.
“Working with Securian Financial allows us to deliver Retirement Loan Protection to more plan sponsors and participants through Securian’s trusted and proven insurance platform,” said Tod A. Ruble, co-founder and CEO of Custodia Financial. “Together, we’re helping to close the retirement savings gap by preventing loan defaults before they happen—automatically and inclusively.”