Executive Summary
A small percentage of U.S. companies including PwC, Fidelity, and Aetna have stepped up to help their employees cope with the education loans weighing them down by offering them cash to help them reduce their debts. One downside of their approach is simply giving their workers cash raises their income taxes, diminishing the impact of their efforts. To address this dilemma, Abbott, took a different approach. It introduced a program last August to contribute 5% of pay to a tax-deferred 401(k) plan for full- and part-time workers who direct at least 2% of their pay toward paying down their student loans. The Internal Revenue Service reviewed and ruled favorably on the 401(k) plan structure to make this possibl…
Read the full article at: https://hbr.org/2018/11/how-we-help-employees-pay-down-student-loans-and-save-for-retirement-at-the-same-time