Tag: student loan repayment benefits
It’s important to first gauge employees’ interest in such programs, and to assess the costs, a Willis Towers Watson expert says.
While the service is offered as a package, plan sponsors will be able to choose select solutions for their needs.
With the benefit tied to its 401(k) plan, CSAA says 60% of its employees are contributing to the 401(k) for the first time or were not taking full advantage of the company’s 6% match prior to the program.
The legislation would permit employers to contribute up to $5,250 tax-free to their employees’ student loans.
In an Issue Brief published by the Employee Benefit Research Institute (EBRI), Neil Lloyd, partner and head of DC & financial wellness research at Mercer, explains choices plan sponsors have for offering student loan repayment benefits.
The 2018 PLANSPONSOR Defined Contribution Survey also found 403(b) plan sponsors, to a higher degree than respondents overall, offer college savings and student loan repayment benefits.
The Retirement Parity for Student Loans Act would permit 401(k), 403(b), and SIMPLE retirement plans to make matching contributions to workers as if their student loan payments were salary reduction contributions.
Edukate’s 48,000 users can engage with Gradifi’s solutions once their employer adds the benefit to their platform.
The IRS recently issued a private letter ruling approving a student loan repayment benefit within a retirement plan; ERIC wants this expanded to apply to all plan sponsors.
The OneAmerica survey examines other topics relating to participant financial wellness, including health care expenses and the use of health savings accounts as short- and long-term savings vehicles.
IonTuition finds more than half (52%) of respondents still owe more than $15,000 in student loans, and the year-over-year data shows the number of respondents with more than $30,000 in student loans actually increased over time compared to initial borrowing.
Because participants receiving a student loan repayment non-elective contribution can still make deferrals to the 401(k) plan and receipt of the contribution is not dependent on whether the employee makes deferrals to the plan, the IRS ruled the benefit will not violate the “contingent benefit” prohibition of the Income Tax Regulations.
One-third would sacrifice retirement benefits.
The SaaS firm has expanded its platform and initiated new partnerships to help employers easily roll out student loan refinancing as an employee benefit.