I hadn't even contemplated the reality of such a move until my own employer migrated plan administrators and the option of a 401(k) loan first materialized – and was also the first topic of discussion with our new advisor.

As a source of emergency funds and a last resort, it's a nice option to have, admittedly. But like the whole payday loan crisis – not to mention America's love-hate relationship with credit cards – it's a dangerous proposition.

And with more and more participants finding themselves in financially tough waters, the loans are building to an epidemic level.

What's more, any miniscule hope of creating even the tiniest of retirement nest eggs suddenly goes upside-down like an underwater mortgage – making the chances of even paying it back a challenging prospect, not to mention getting the 401(k) back on a growing track.

What advice can you offer to your participants – or to plan sponsors who may be fielding questions from employees looking for a loan option?

Like any financial wisdom, letting them know the dangers of short-term benefit with long-term damage seems paramount. Yes, it's an attractive and sometimes absolutely necessary route to take when larger financial problems or health-related bills suddenly materialize, but you need to let them know that it should absolutely be the last option.

You also need to be perfectly clear on the tax implications and, most importantly, the counterproductive nature of the loan itself. It may be the best support you can provide.