Plan Sponsors: How to Win the War for Talent

Retirement plan advisors are busy helping their plan sponsor clients (and participants) sift through the 92 mandatory and optional provisions in SECURE 2.0, especially highlighting those most pressing in 2024.

One generating interest (if not the most interest) is the student loan matching program. It permits employers to match student loan payments under 401(k), 403(b), SIMPLE, and 457(b) plans as if those payments were elective deferrals. It may rely on employee certification regarding the payment amount, and the employer contribution is treated as a match. The ADP test can be done separately for those receiving loan matches (repayments are not treated as deferrals).

“I like the student loan match provision; that one’s fantastic,” said Laurie Lombardo, Vice President of Product Development and Management with Voya Financial. “[We’ve] done some research internally, and if plan sponsors take advantage of this, it can help win the war for talent.”

More specifically, Lombardo said that 83% of workers with student loan debt agree that they would be more likely to work for an employer if they offered assistance in paying it off. 

“That’s a really high percentage,” she added. “And 86% agree that college savings plans and student loan debt solutions are important workplace benefits for employers to offer. And then 95% of those with student loan debt said they’d be more likely to save for retirement if they felt like they had student debt under control. So that one excites me because it resonates with the population of people with student loan debt.”

She emphasized that it’s something currently standing in the way of saving and is now widely available for plan sponsors to take advantage of.

“Sponsors can educate themselves on what is permitted—and it can be simple,” Lombardo concluded. “If you’re a small organization, you can rely on self-certification. It doesn’t have to be that burdensome. Recordkeepers and independent firms have solutions to help make the administration easier. So I would love to see our employers dive into this one.”