Participant Loans: Benefit or Detriment?

For many years, plan sponsors have wrestled with the decision to offer loans to their plan participants.  Some consider them to be a benefit and even promote them as a legal way to use tax free money while participating in the plan.  According to the Employee Benefit Research Institute, 87% of plan participants can take a loan against their retirement account. Of those employees with access to take a loan, about one-fifth borrow against the retirement account.  Come retirement, what are the effects of loans taken from pension funds on an employee's account?