Extra Employer Match Helps Workers with Student Debt Save More
For younger employees, setting aside money for retirement can take a back seat to the more immediate need to pay off student loan debt — a choice that can have long-term consequences. But at Abbott Laboratories, a new benefit provides some relief from that uncomfortable position.
Abbott announced on June 26 a new employee benefit that makes it possible for employees who are paying their student debts to also have at least some accumulating retirement savings as well.
Under the program, which it calls “Freedom 2 Save,” Abbott will contribute an amount equal to its standard 5% match into the 401(k) accounts of employees who are putting 2% of their pay toward paying off their student loans. The program covers both full-time and part-time employees, and applies even if eligible employees don’t contribute to their 401(k)s.
“We see our young professionals coming to us with a problem: Student loan debt payments keep them from setting aside the money they’d like to put in savings for retirement,” said Steve Fussell, Abbott’s Executive Vice President for Human Resources, in a press release
. “We don’t want student loans to prevent them from beginning to save when time is on their side.”