DID YOU KNOW?
You Can Help Employees with Student Debt More Easily Save for Retirement
Recently Revenue issued a Private Letter Ruling to Abbott that has attracted a lot of attention and interest. This related to the situation where a company can offer a student loan “match” (technically an employer nonelective contribution) into an employee’s retirement savings plan (401k or 403b) for employees who contribute a certain percentage of pay towards their student loan repayments, even if they don’t contribute to the plan. This new approach to funding employer contributions can enable employees who are having to focus on repaying significant student debt to still build their retirement savings.
With student loan debt at all-time highs, employers can use this as an opportunity to attract and retain high-potential employees.
WHAT SHOULD PLAN SPONSORS DO NEXT?
Read our article about what we’ve been seeing in the market (especially following Abbott’s program announcement) as well as some of the challenges to keep in mind as you look to design this for your employees. Mercer has extensive experience with the necessary plan design, non-discrimination and regulatory hurdles.