Standard enterprises are evolving in order to get ahead of their competitors. The latest benefits movement now allows employees to get the best of both worlds within their yearly benefits package. There has recently been a fork in the road when it comes to choosing how you want to financially plan for your future - pay off your student loans as soon as possible and delay your retirement or concentrate on saving for your retirement now and hope that your student loans’ interest doesn’t snowball into a financial avalanche.
It's a Win-Win
When prompted with this important financial concern by employees, HR generalists are finding that a dual matching option is a heavily needed benefit that supports just about every employee. It covers all of your bases: employee financial wellness and stability; a confident retirement fund; and an alleviated student loan principal. Instead of making your employees pick one or the other, allow them to pick what benefit they need the most. They can choose what percentage goes towards retirement and what percentage goes towards paying off student loans. That way, employees with or without student loans can opt to put more of their money towards the thing they need, or don't need, the most, utilizing the full potential of a benefits package. In terms of cutting edge benefits packages, offering a two-option benefits is definitely a revolutionary way to not only recruit new talent but also keep current employees happy.
How It Works
Company employees who opt into this benefit have a total percentage of their pay that is eligible to go towards either retirement, student loans, or both. But, before you dive into the possible options, there are usually different requirements that are to be met in order to make someone eligible. Typical requirements usually revolve around how much time you are with the company. In a lot of cases, you have to spend a certain amount of time as a full-time employee before the company will give you flexible options. Once the requirements are met, the options are almost unlimited. For example, let’s say that most employees put 6% of their salary towards their retirement. Then, they can now elect what the percentage of their pay they would like to go towards retirement or student loans, whichever is more important to them, and the remaining percentage goes towards the other benefit. So, an employee could elect to put 5% towards retirement and 1% towards student loans or 1% towards retirement and 5% towards student loans. Now, obviously these are arbitrary numbers and it will vary depending on employer and salary. Nevertheless, flexible fringe benefits make a world of difference for employees who are burdened with multiple financial predicaments.