Abbott Laboratories, a pioneer in linking student loan repayments to 401(k) plan enhancements, has issued a how-to guide for employers that might want to do something similar.
The company offers a brochure describing its experience with Freedom 2 Save, which it launched in 2018; providing guidelines for employers; and offering comments from employees who have participated.
"People with student debt still often have to make a choice: pay their monthly student loans or put money in their 401(k)s," Mary Moreland, executive vice president for human resources, wrote in the introduction to the brochure, which can be downloaded from a company website. "At Abbott people can do both."
Moreland won an Excellence & Innovation Award in 2019 for the Abbott program, which provides employees who put 2% of their salary annually into paying off a student loan with an annual company contribution to their 401(k) accounts of 5% their salary — the equivalent of a company match.
Employees don't have to put any money into their 401(k) accounts to qualify for the student loan-linked company contribution.
The Excellence & Innovation Award is sponsored by Pensions & Investments and the Defined Contribution Institutional Investing Association.
The brochure lays out several steps for employers such as building a business case, exploration, partnering and organizing for launch.
To build a business case, Abbott counsels employers to assess why the program is needed and also evaluate "its benefits, return on investment and affordability."
Exploration means determining how well a program would fit within an employer's overall wellness strategy, what resources will be needed and how success will be measured.
Partnering means contacting the record keeper and seeking a student loan debt vendor.
To organize the launch, Abbott tells employers to "clearly define" the audiences they want to reach, tailor communications to their specific needs and considering using more than emails — such as YouTube, videos, podcasts and social media — to deliver the message.