It has now been close to a year since the Secure Act 2.0 was approved and options were added for employers to tie their retirement plans to other programs like Student Loan Assistance. In our experience, this hasn’t been taken up as a common approach for employers. Simply put, these options present unnecessary complexity for companies. Needing retirement plan amendments, and new plan sponsors to accommodate. A quote from a recent PLANSPONSOR article reiterated these thoughts saying employers ‘…are playing wait-and-see and are waiting to hear from their recordkeeper on what they feel are the benefits and difficulties of implementing these programs.’ As a multitude have come up.
Student Loan Repayment programs in their traditional form, with employers contributing directly toward employees loans each month have been offered since 2015. Alongside their retirement plans, companies have offered Student Loan Repayment separately and reaped the benefits of attracting talent 13% faster, retaining talent 36% longer, and improving gender + cultural diversity.
As your company considers new programs headed into 2025, it’s a wise choice to keep benefits simple. Adding Student Loan Assistance separately from your Retirement plan. Taking the tried and tested route to this benefit.
- References: https://www.plansponsor.com/plan-sponsors-weigh-secure-2-0-options/?utm_source=newsletter&utm_medium=email&utm_campaign=Newsdash&oly_enc_id=2915J5597689C8W (PLANSPONSOR November2024)