Betterment at Work, a provider of modern financial benefits for today’s diverse workforce, announces the first commercial product that allows small business employers to automatically match employee student loan payments with a 401(k) contribution.
Sarah Levy, CEO of Betterment, said:
“We know that student debt can be a major impediment to saving for retirement. 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.”
As mentioned in the announcement, Betterment at Work’s new product offering comes “as a key provision from the Secure Act 2.0 legislation goes into effect, allowing qualified student loan repayments to count as elective deferrals and be eligible for 401(k) matching contributions from an employer.”
Employees with access to Betterment’s 401(k) can reportedly “record qualified loan payments within the platform.”
Employers are then able to match these payments “with a contribution to the employee’s 401(k), enabling borrowers to pay down loans while continuing to proactively save for retirement.”
In order to simplify administration of this new match, employers are able to choose “to make the match annually even if their other 401(k) match happens on a per-payroll basis.”
As noted in the update, Betterment at Work is described as “a leading provider of 401(k)s and modern financial benefits for today’s diverse workforce, empowering small-to-medium-sized businesses to attract and retain talent.”
Built on the same technology that is currently powering their digital investment platform, Betterment at Work aims to help employees with meeting goals “starting with retirement and going beyond, with customizable portfolios, debt management tools, easy-to-understand advice, and more.”
Their automation makes it easy to “offer a better 401(k), and Betterment offers expertise to help administer a plan for employee accounts, supporting personalized choice.”
