Question: We are in preliminary discussions with our recordkeeper about adding the SECURE 2.0 provision allowing employers to make matching contributions connected to student loan repayments. Is there any data available yet to help us determine the value of offering this to our employees?
Answer: Following a pause for three years during the COVID-19 pandemic, federal loan repayments resumed on October 1 of last year. After surveying more than 2,100 federal student loan borrowers, Corebridge Financial found that 75% said that resuming student debt payments will impact their ability to save for retirement. In order to make payments, 22% said they plan to reduce how much they save for retirement, and 29% plan to reduce their emergency savings. And while many assume younger employees are impacted the most by student loans, a new survey by Nationwide found that more than 1 in 10 employees aged 45 and older currently have student loan debt. Most of these individuals (61%) agree that the reinstatement of student loan repayments has negatively impacted their financial stability and long-term planning. For more in-depth discussion, including considerations for plan sponsors, check out this article: “Student Loan Repayments Expected to Derail Employees’ Retirement Savings” (PLANSPONSOR, September 27, 2023.” (https:// tinyurl.com/2p8yrd69).
