Avangrid

Last year, renewable energy company Avangrid, Inc., added a student loan debt repayment benefit, consolidated its union and nonunion retirement plans into one 401(k) plan, and laid the groundwork necessary to implement the BlackRock LifePath Paycheck fund as the plan’s default investment.

“Student loan debt is a growing issue, as we all know, within the U.S.” for workers, says Brian Williamson, manager of retirement programs and investments at Avangrid.

The company, headquartered in Orange, Connecticut, employed its plan recordkeeper, Fidelity Investments, along with data analytics and consumer credit reporting company Experian PLC to analyze the employer’s nonunion employees’ student loan debt to gauge interest in a debt-repayment program.

A survey’s results told Avangrid’s management that employees were shouldering a significant burden of student loan debt. Nearly 25% of the employees were thus encumbered, with an aggregate total of $65.6 million in loans outstanding across the group; individuals averaged a debt load of $36,100 when the analysis was conducted, in 2022.

Avangrid’s survey showed that 63% of respondents were paying off debt for themselves, a spouse or someone else. Results also showed that 57% were interested in employer support for repaying the debt, and more than 90% of those who said they’d participate in an employer student loan repayment program also said they’d increase their 401(k) contributions as a result.

According to Paul Visconti, senior director of total health and retirement programs at Avangrid, the company had multiple goals for a student debt repayment program. Besides to provide some financial relief to nonunion employees, the sponsor wanted to raise savings rates in the 401(k) plan; increase employee attraction and retention; support the company culture of employee advocacy and inclusion; and strengthen employees’ financial security, engagement, motivation and productivity.

Taking advantage of the program can “free up capital for people to pay bills and other necessities, or obviously [build up] emergency savings,” Williamson says.

In the program Avangrid chose, for each eligible, enrolled employee, Avangrid pays $250 a month via Fidelity’s Student Debt Direct service to the student loan servicer, up to a $9,000 lifetime maximum. Another Fidelity service, Student Debt Retirement, enables the plan sponsor to contribute money through Fidelity to employees’ student loan providers, outside the 401(k) plan. Avangrid held two virtual employee education sessions to highlight those Fidelity resources, to promote the program and explain the benefits to employees.

The student loan benefit went live a year ago February. As of this February 12, Avangrid has paid $1,506,750 toward employee loans. As a result, the 700 participating employees saved an estimated $1,781,609 in principal and interest payments, Visconti reports.

Last year, the company also started providing mandatory financial training for nonunion employees, beginning with a module on saving and budgeting. By year’s end, 5,512 employees had completed the training, and 734 more are in the process, according to Avangrid.

Avangrid also worked with Fidelity to analyze the company’s benefit programs across financial, health, insurance, leave and paid-time-off benefits, and diversity, equity and inclusion efforts to inspect how “equitable Avangrid benefits are.”

“We’re trying to have benefits that lower-income workers can take advantage of, as well as [workers] who get paid well,” Visconti says.

—Noah Zuss