These days, anyone who knows a recent college graduate also knows that student loans have become a necessary evil for many of those in pursuit of a higher education.
Indeed, we recently wrote about how employers are beginning to recognize the burden these new entrants to the workforce face, and what some of them are doing about it.
Now comes word today that Natixis Global Asset Management has announced a new benefit to assist employees with the repayment of their student-loan debt. The company will contribute up to $10,000 to every full-time employee who has been at Natixis for at least five years and has outstanding Federal Stafford or Perkins Loans.
Natixis — a Boston-based, multi-affililate organization offers access to more than 20 specialized investment firms in the Americas, Europe and Asia — said its student loan repayment benefit will take effect on January 1, 2016, based on employees’ outstanding student loan balances. The payments will be taxed at the supplemental bonus rate and cannot be combined with Natixis’ tuition reimbursement policy.
According to the company’s press release, the decision to offer this benefit was born out of conversations with members of Natixis’ team — millennials (Gen Y) in particular — who are delaying important financial milestones because of the burden of student debt. In addition, research conducted by the company indicates that although the best practice for retirement saving is to start young, student-loan debt is keeping a significant number of young workers from taking that first step.
The company’s 2015 Retirement Plan Participant Study of 1,000 U.S. investors found that nearly one in four (23 percent) Americans and more than a third (35 percent) of millennials who do not contribute to a company-sponsored retirement plan cite the need to pay off student loans as a factor that keeps them from participating. Among the survey’s millennial respondents, student debt is the third most common factor for not participating, behind needing the money today (54 percent) and feeling the company match isn’t big enough (43 percent).
“At Natixis, our mission is to help people make the right financial planning decisions that allow them to meet their goals, and that includes extending the spirit of that mission to our employees as significantly as we can,” said John Hailer, President and Chief Executive Officer of Natixis Global Asset Management in the Americas and Asia. “In addition to hearing firsthand from our younger employees about the toll student debt can take on other financial obligations – such as saving for retirement – our extensive research on Americans’ financial health supports the need to provide student loan repayment as a benefit.”
The benefit will consist of one $5,000 cash payment to employees after five years of anniversary working at Natixis, followed by annual payments of $1,000 distributed over the next five years for a total of $10,000.
“We pride ourselves on already providing a fantastic range of benefits to our employees and are excited to help lead the charge in offering student loan repayment, a largely untouched benefit in the workforce,” said Ed Farrington, executive vice president of business development and retirement at Natixis Global Asset Management. “We are confident that this new benefit will empower our younger employees to take full control of their financial futures.”
While student-loan payment programs may indeed still be “a largely untouched benefit in the workforce,” it’s safe to assume that it’s only a matter of time before it becomes standard fare on most organizations’ roster of benefits.