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They also report that low-risk borrower are less despondent in focused rather than competing marketplaces; and in focused marketplaces, high-risk borrower are more likely to be disheartened the longer their relationship lasts. The results suggest that disincentives are more effective in focused rather than competing applications.

Prolongation of the repayment period for pension credits - good for the employees, plenty of questions to be answered

Human Resources and Law are likely to be faced with the uncomfortable task of informing a retiring worker not only that he is no longer working for his firm, but also that he has a rather short time limit to pay back an unpaid 401(k) blank-credit. As a step that may be useful in these circumstances, the Tax Act 2017 (the "Act") provides extra discharge for the participant in the pension scheme in such a scenario.

In particular, the Act prolongs the term during which subscribers may reimburse sums due with loans in arrears before the loans fall into arrears, leading to incomes being included and potentially subject to extra taxation for those under 59 years of age at ½ It is now possible to pay back loans up to a participant's due date (including renewals) for individual returns.

Seen from the point of view of a subscriber, this amendment should be a welcome relief: it provides for reimbursement to a future employers or IRA. However, on the employers' side, there are some points that need to be taken into account. Review and update your credit policy and staff communication for the longer payback time.

Specify whether your pension scheme accepts loans repaid for arriving staff with unpaid balance from a previous employers scheme. Think about how to manage the loans of the previous companies from a procedural point of view - what information is needed / how do you get it? Overall, the extension of credit payment deadlines seems to be a good option.

Helping needy subscribers prevent extra income/sanctions and encouraging the maintenance of pension provision in the "pension system". However, there may be significant bureaucratic burden associated with the acceptance of credit balance from previous pension schemes for employees, which may make this unwanted for them. Perhaps the capacity to pay back credit balance in an IRA could be the answer for these people.