How can employers boost workers’ 401(k)s? Student loan matching.
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The SECURE 2.0 Act of 2022 for the first time allowed employers to match eligible employee payments on student loans. The SECURE 2.0 Act of 2022 for the first time allowed employers to match eligible employee payments on student loans. A senior benefits manager at eBay previously said it was "kind of a no-brainer" for the company to offer matching funds after the act's passage. The company already budgeted for all employees to get the full matching contribution in their retirement plans and had a 96% participation rate, meaning the new offering wasn't a big expense. "For employees working to pay down student loan debt while also trying to prepare for retirement, access to an employer match can make a meaningful difference," said Laurel Taylor, founder and CEO of financial wellness company Candidly, which helped fund the research. "Student loan retirement matching programs can provide another way for employees to build retirement savings while meeting an important financial obligation, rather than feeling that one financial priority must come at the expense of the other." Twenty percent of 401(k) plan participants ages 25–69 have student loan debt, with younger workers more likely to have greater levels of debt, EBRI found. Those with student loan debt generally contributed at lower rates, and "lower median balances among student loan borrowers persisted across all income and...
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