CSAA Insurance adds student loan, 401(k) matching benefit
Another employer is taking steps to help workers pay down student debt — and save for retirement in the process.
AAA insurer CSAA Insurance Group now allows full- and part-time employees to use up to 4% of their employer-matched retirement benefit to pay down their student debt. Once workers contribute 2% of their salaries to their 401(k), they can choose to direct the remaining 1% to 4% of their 6% employer-matched funds toward paying down their student loans. The benefit is offered through student loan repayment plan provider Tuition.io, the company says.
“We take a holistic view of wellness at CSAA IG, which includes providing employees tools and resources to build financial stability,” says Kristin Utler, compensation and benefits executive at CSAA Insurance Group in a statement. “Student debt can burden people for years, and if we can offer employees help to manage their student debt, while getting them in the practice of contributing to a retirement account, it’s a win for everyone.”
CSAA joins a number of other employers that are offering student loan repayment benefits to workers. For instance, Travelers Insurance recently announced it would offer up to a 5% contribution to 401(k) plans when employees contribute to their student loans and retirement plan. Fiat Chrysler partnered with provider CommonBond in January to provide a student loan refinancing benefit.
CSAA says that 230 employees have signed up for the program since it launched in January; about 65% of the workers using the match are millennials — a group that is especially burdened by student loan debt, experts say.
Student debt is a major reason why fewer younger workers are saving for retirement, says Tuition.io CEO Scott Thompson. More employers, he says, are turning to benefits that will help employees both save for retirement and pay down their debt.
“We think it’s an approach more companies will consider in the future as younger generation workers increasingly look to their employers for solutions managing their student debt,” he says.