Employers are hesitant to offer workers a new perk that would help many of them pay down student loans while saving for retirement, despite a law that makes it easier for companies to do so, experts say.
The SECURE Act 2.0 Act, which became law in December 2022, included a provision allowing employers for the first time this year to count student loan payments toward matching 401(k), or other retirement, contributions. It aims to help Americans avoid the difficult choice of using their money to repay student loans or save for retirement.
But lingering economic worries, including the chance of a slowdown, could foil those plans.
Companies aren’t in a hurry to offer workers the benefit amid the uncertainty, experts say. That will keep borrowers wringing their hands on how to best use their income.
Nearly two-thirds of companies that the nonprofit trade association Plan Sponsor Council of America surveyed this year said they won’t offer student loan matching and only 5% have implemented it or plan to this year. When asked why they didn’t plan to offer this benefit, answers ranged from cost, complexity, competing priorities, lack of interest or necessity.
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“Compensation teams across the corporate world are laser-focused right now on cost control, so I suspect that many will be reluctant to consider expanding their benefit offerings,” said Aaron Terrazas, chief economist at job site Glassdoor.
That said, certain industries like…