James Archer

Why don't companies offer debt-related benefits for employees?

Larger companies typically offer a 401k or similar retirement benefits program, but (depending on the nature of the employee population), it seems to me that this might not always be the most useful benefit for an employee.

We’re all familiar with the “if you start saving X at age Y, you’ll be a millionaire by Z” formulas, but there’s something those formulas don’t address: debt.

Credit card debt. Auto debt. Student loan debt. All with minimum monthly payments, and most with high interest rates. For most of us, it doesn’t do much good to put $100 toward a retirement plan growing at 10% when we’ve got debts growing at 15%.

Instead of offering retirement plans, why don’t companies offer debt-related benefits to employees? Incentives, matching, etc., could give employees more significant financial benefits than a straight 401k, and addresses the major problem of productivity-sapping debt distraction.

Our culture, our human resources practices, our tax code, and our employee expectations are all set up around retirement planning. I don’t even know if it’s possible or feasible to offer debt benefits, but it’s a concept I’m very interested in exploring.