Financial stress is silently eroding your workforce—97% of employees are feeling the pinch, and it’s hitting your bottom line with increased absenteeism and plummeting productivity. A recent article in Employee Benefit News discussed how retirement plan sponsors and their advisors can turn the tide by offering innovative benefits that tackle student loan debt, boost emergency savings, and help secure retirement futures. These tools not only help ease employees’ financial burdens but can also position employers as champions of workplace well-being.
A SecureSave study cited in the EBN article shows 46% of workers are skipping essentials like medical care or car repairs, while 33% are making choices that jeopardize their retirement savings. Rising costs due to inflation compound the issue, with student loan debt forcing many working Americans to prioritize immediate needs over long-term security. Fortunately, recent legislative changes provide employers with powerful options to help.
The SECURE 2.0 Act enables employers to provide 401(k) matching contributions to employees who make qualifying student loan payments. This allows workers to reduce debt while building retirement savings, receiving the same employer match as direct 401(k) contributions, up to a combined $23,500 for most plans in 2025, depending on income. Employers must ensure consistent matching rules, which may require additional administrative support to track payments effectively.
Additionally, employers can offer up to $5,250 annually in tax-free student loan repayment assistance through 2025. This benefit can help reduce employees’ debt, freeing up income for priorities like emergency savings or retirement. Emergency savings accounts, highlighted by platforms like SecureSave, act as a critical buffer against unexpected expenses, reducing reliance on borrowing from retirement funds or foregoing basic but important expenses. These accounts can enhance financial wellness, potentially boosting retention and morale.
For plan sponsors and advisors, emergency savings benefits are strategic assets. Offering student loan matching or repayment assistance can attract and retain talent, especially younger workers burdened by debt. Advisors can guide plan sponsors through administrative complexities, ensuring compliance and maximizing impact. By offering these benefits, employers demonstrate a commitment to employees’ financial health, fostering a more engaged and productive workforce while helping to bolster retirement readiness and improve outcomes.
