The percentage of all participants with outstanding loans was 14.6 percent, down from about 26 percent the previous year, and well below the average over the past decade.

That undoubtedly is welcome news to many retirement advocates. The consequence of "plan leakage"—401(k) loans are but one component of the phenomenon—have been significant on the nation's collective savings rate.

Leakage accounts for 30 to 45 percent of total contributions on a given year, according to Borrowing from the Future: 401(k) Plans and Loan Defaults, a working paper published through the Pension Research Council at the University of Pennsylvania's Wharton School of Business.

The Government Accountability Office says that amounts to about an $85 billion a year drain on 401(k) accounts.

For a country facing a retirement asset shortfall that some experts calculate to be in the trillions, leakage of 401(k) assets is clearly an issue.

But does that mean 401(k) loans are a bad thing?

Not necessarily, says Rebecca Katz, a principal and head of participant strategy and development at Vanguard.

"Loan is not a four-letter word" when it comes to the nearly ubiquitous plan feature, says Katz.

"Not all debt is bad, and in some cases borrowing from your 401(k) can actually be a wise strategy," she says.

The reality is that defaults on plan loans account for a small proportion of the larger issue of plan leakage, notes Katz.

Data from the Pension Research Council estimates loan defaults create $6 billion of losses in retirement savings annually, and generate over $1 billion in tax revenue in penalties.

A far greater culprit of to the overall problem of plan leakage are the 401(k) cash outs that occur when workers change jobs, which lead to $74 billion in annual losses to 401(k) savings, says the GAO.

By and large, loans against 401(k) assets get paid back—90 percent are repaid, with interest and without the 10 percent penalty assessed on loan defaults.

While that is good news for a plan feature that Katz says can be a value add for participants and sponsors, she warns that in her experience, far too many participants remain in the dark when it comes to understanding the risk in borrowing from 401(k)s.

"Most people just don't understand the impact of losing your job when you have a loan outstanding," she said.

"This is where plan sponsors need to invest in their education effort surrounding plan loans," explained Katz. "The impact of having a loan come due immediately, and the prospect of a 10 percent penalty that participants face if they lose or change jobs before paying back their loan, needs to be clear—that part of sponsors' education efforts can not be left to the fine print."

In 2014, only 0.7 percent of total plan assets were loaned. The average outstanding loan due was $6,216—both figures were at 10-year lows, according to the PSCA.

Notwithstanding the downward trend, the Pension Research Council paper shows that over a five-year sampling, almost 40 percent of plan participants held an outstanding loan.

"Everybody does it," says Marina Edwards, a senior consultant with Towers Watson, who says she commonly sees large plans with 40 percent of participants holding 401(k) loans.

"We strongly encourage participants to not take loans," says Edwards.

"The loan you thought was a great idea at the time can end up really damaging your account," she added.

That said, participants seem willing to take that risk.

Typically, full repayments of plan loans are due within 60 days, in the event that a participant leaves a job with an outstanding loan, notes Edwards.

But even for the vast majority of participants that pay back their loans, there remains the core risk of "opportunity cost"—or the investment gains lost on borrowed money that would otherwise be invested.

One way participants can hedge against that opportunity risk it to rebalance plan assets prior to taking out a loan, says Edwards.

"The problem with taking a loan of $10,000 is that that money is now out of the investment cycle," Edwards explains. Five years is a typical loan period, she said.

By adding to the equity allocation in a portfolio prior to taking out the loan, participants can divert more of a loan's repayments into stocks, and potentially help offset the investment losses on the borrowed money.

If that sounds complicated, it is because it is. "It's not an easy concept to explain," says Edwards.

"I would not encourage a participant to execute the strategy on his or her own," she cautions. "Understanding the potential value of reallocating assets prior to a loan is something that every record keeper's call center is equipped to help participants understand. It can be a useful strategy, but it's always advisable to pick up the phone and access advice before doing anything."

The cost of 401(k) loans will rise as interest rates do. The Department of Labor limits how much interest can be charged. All rates are tied to the prime interest rate—65 percent of plans charge the prime rate plus 1 percent, according to PSCA data.

PSCA data shows that in 2014, the average loan rate for all plan sizes was 4.09 percent.

A few plans—1.3 percent—charge participants as much as the prime rate plus 3 percent.

Clearly, understanding what the interest charged on the loan is essential in determining if a loan from a 401(k) plan can be cheaper than more traditional forms of credit.

Communicating and educating participants on that, and the other nuances and potential complications to taking out loans, falls on the shoulders of plan sponsors, reminds Katz.

Sponsors also need to be cognizant of whether or not their plan policy is potentially too encouraging of plan loans, as offering access to more than one loan at a time can be perceived as a tacit endorsement by sponsors to borrow exceedingly, says Katz.

"The bottom line is that they are not always a bad thing, and if structured the right way, access to loans has actually been shown to encourage participation," added Katz.