Concerned about the financial stress on employees who still have student debt, officials at Unum Group, led by Carl Gagnon, spent two years on a project that led to the insurance company allowing employees to convert some unused personal time off into debt relief.
"We wanted to be methodical," said Mr. Gagnon, assistant vice president, global financial wellbeing and retirement programs at Chattanooga, Tenn.-based Unum, whose PTO program starts in January and earned an honorable mention from the judges at the Excellence and Innovation Awards.
At the end of each calendar year, employees can convert a minimum of eight and maximum of 40 hours of unused PTO toward paying off student loans. PTO also can be used for a student loan repayment for a spouse or child as long as the employee is the signatory or co-signer of the loan.
The program includes a student debt tool that allows employees to see all of their loans in one place and a targeted education campaign to help families plan, save and pay for higher education.
Mr. Gagnon said Unum Group officials decided that the structure of the company's defined contribution plan wouldn't allow them create something similar to Abbott Laboratories, which annually rewards employees with a contribution to their 401(k) accounts if they pay a percentage of their salary to retire student debt. "We wanted to take a different approach," said Mr. Gagnon.
To develop the PTO student loan program, Mr. Gagnon had to enlist cooperation from multiple departments — payroll, human resources, finance, legal, taxation and corporate communications. Unum worked with Fidelity Investments, the company's record keeper for its $1.8 billion 401(k) plan, to set up the mechanism by which the PTO was converted into funds that were then paid to loan servicers.
Unum estimates 2,100 to 2,600 active U.S. employees carry student debt and 700 to 800 will take advantage of the offer.
Of course, Mr. Gagnon had to win the OK from senior leadership as well as rank-and-file employees. Top executives — including Richard McKenney, the president and CEO, and Elizabeth Ahmed, executive vice president of people and communication — attended town hall meetings to discuss the program and answer questions.
Mr. Gagnon also lined up support at the grassroots level, enlisting members of the company's emerging leaders group — younger employees — to provide feedback from focus groups about the program design and communications efforts.
"We talked to people who talked to their peers," he said.