Betterment at Work will soon allow small business employers to match student loan payments with a 401(k) contribution.
The financial wellness platform announced its new student loan 401(k) matching solution on Thursday, aimed towards helping employees pay down debt while contributing to their retirement savings.
“We know that student debt can be a major impediment to saving for retirement,” said Sarah Levy, CEO of Betterment. “Our industry-first student loan 401(k) matching solution is a compelling addition to our modern 401(k) that will help to broaden plan participation to those whose student debt previously kept them from saving for retirement.”
According to a release, employees with access to Betterment’s 401(k) can record qualified loan payments within the platform. Employers can then match these payments with a contribution to the employee’s 401(k) and can choose to make the match annually even if their other 401(k) match happens on a per-payroll basis.
As of 2024, SECURE 2.0 legislation now considers qualified student loan repayments as elective deferrals, and thereby allows employers to make matching 401(k) contributions to employees who pay back their college loans each month.
The resurgence of student loan payments, along with the newly instated provision, has pushed more organizations to offer student loan 401(k) matching contributions. Just this week, fast casual chain Chipotle announced it would offer SoFi at Work’s Student Loan Verification (SLV) service to help workers pay down student loan debt while saving for retirement.
Engineering and design consultancy firm Kimley-Horn also made headlines last month after it said it would match employee 401(k) contributions based on student loan repayments. The firm announced it would also utilize SoFi at Work’s SLV service to operate plan design, data security, reporting, and student loan payment verification.
The new benefits come at a time where employees are strapped for savings due to rising costs of living and debt. A recent Betterment at Work survey found that 64% of borrowers said their student debt had impacted their ability to save for retirement.
SEE ALSO:
- Chipotle Will Offer Student Loan Matching Benefits in Response to Upcoming ‘Burrito Season’
- SoFi at Work and Kimley-Horn Partner on Student Loan Repayments
- 401(k) Contribution Cutbacks Likely When Student Loan Payment Pause Ends
Amanda Umpierrez is the Managing Editor of 401(k) Specialist magazine. She is a financial services reporter with over six years of experience and a passion for telling stories and reporting news. Amanda received her degree in journalism and government and politics at St. John’s University. She is originally from Queens, New York, but now resides in Denver, Colorado with her partner. In her free time, Amanda enjoys running, cooking, and watching the latest drama show.