Allianz Life recently added a perk for its employees who are paying back student loans, using those payments as a way for workers to get the full company 401(k) match.
It’s a plan design element that has gained momentum over the past few years, as employers recognize the burden of college debt that many young employees carry as they enter the workforce. A private-letter ruling from the IRS to Abbott Laboratories approved what was likely the first such arrangement, setting a precedent that other employers have followed.
For example, The Travelers Companies indicated that they would add a program for their employees this year.
Retirement plan record keepers are also moving to add such services. Earlier this year, Voya Financial indicated it would make a service available to its plan clients through student-loan services firm Vault.
At Allianz, the company will consider student loan payments as amounts necessary to reach the full 7.5% company 401(k) contribution, the company announced Wednesday. That allows the company to “match” contributions, even if the employees do not make their own contributions to their 401(k) accounts.
The firm officially added the employee benefit July 1, with the service provided by SoFi, a company spokesperson confirmed.
Under the arrangement, “the company will assess an employee’s personal student loan payments, and determine how much the company will contribute to their 401(k) account, up to the full contribution of 7.5% of eligible pay,” the announcement read.
“We know that student loan debt is a significant issue, one that often delays saving for retirement,” Jenny Guldseth, Allianz Life chief human resources officer, said in the company’s announcement. “Being able to address this matter head-on as a part of our overall benefits package is important to us and our employees.”
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