Organizations are seeking new ways to attract and retain employees during what some economists and human resource experts are calling “The Great Resignation.” People are leaving their current jobs in record numbers in search of better compensation and a more flexible work-life balance.
One way that companies can stand out is by offering unique and meaningful benefits to employees. An avenue to consider is a financial wellness program, which helps reduce financial-related stress for employees while enhancing the organization’s benefits package.
A well-rounded financial wellness program includes offering tips and tools related to education savings. When it comes to solving the student debt crisis, the pressure is on. Nearly 43 million Americans, or 1 in 8 people, have federal student loan debt, according to the U.S. Department of Education. Student loan debt can postpone life milestones, such as buying a home or starting a family. The stress of being in debt may also get in the way of productivity at the office. It’s a trillion-dollar problem but incorporating education savings into a financial wellness program can offer a portion of the solution.
Select an education savings program
A 529 plan is a tax-advantaged education savings tool that can help families of various means prevent or minimize future student debt. Many 529 plans offer free education — in person or virtually — to employers and their employees on the benefits of higher education savings.
The largest provider of 529 plans, Virginia529, offers its free Virginia529@work service to help organizations empower their employees in reaching and achieving their financial goals. The service has been adopted by large and small organizations alike, and the response has been overwhelmingly positive.
For organizations interested in adding an education savings program to their employee benefits package, here are a few simple steps to consider.
Set your organization’s goals
Document the goals you are trying to achieve along with the measurable ways you can gauge effectiveness. Is the primary goal savings awareness? Helping reduce employee stress?
Employers should understand why education savings is important and picture the long-term results for their employees, said Jackie Ferrado, community relations manager at WA529. The benefit is for the future — not in the moment, and it’s a continuous work in progress. Presentations can package the program to help families understand 529s, including new parents and grandparents, for whatever season their family is in.
Get connected
Some 529 programs have dedicated contacts who can serve as a resource for the employer. For Tami Foster, employer program director at CollegeInvest in Colorado, managing relationships with her human resources contacts is key.
“There is not enough talk about the importance of 529s. We have 900-plus employers that we work with across the state. Everyone is stressed about saving for education, and we break down the information into bite-size pieces.”
In Colorado, for every dollar an employer contributes to an employee’s CollegeInvest529 account, the employer receives a 20% tax credit, up to a maximum of $500 per employee per year. An employer could give up to $2,500 per employee and receive a $500 tax credit for each person.
“We offer two options: providing education to employers to share with employees on where to start with education savings, or the next level, how employers can contribute to employee 529 accounts — either route can help improve employee well-being,” Foster said.
Spread the word
Make it known to current and potential employees that your organization cares about individual financial wellness by offering a 529 webinar or presentation, including details in your internal communication, or updating your benefits package.
