Chapter pages in book: (p. 173- 176) The Availability and Utilization of 401(k) Loans 173

The transition from defi ned- benefi t (DB) pension plans to defi ned-contribution (DC) savings plans, including 401(k) plans, has involved employees making a variety of choices regarding their retirement saving decisions. Employees who work at fi rms that offer DC plans decide whether to enroll in their employer’s plan, how much of their salary they wish to contribute, and how they wish to invest their plan assets. The chapter by Beshears, Choi, Laibson, and Madrian investigates the parameters of another choice that is often available to 401(k) plan partici-pants: whether they wish to take a loan against their 401(k) balance. The authors perform this analysis by collecting an impressive array of data sets from several sources to describe: (a) the prevalence of 401(k) loan availabil-ity and stipulations that govern their use, and (b) how utilization of 401(k) loans varies across plan characteristics and individuals. Understanding the basic landscape of 401(k) loans is an important fi rst step in assessing the broader implications of the ability of plan participants to take loans agains