PLANSPONSOR - December/January 2020 - 48

PLAN PROFILE
PTO Is Cash for Student Debt
C
A sponsor lets workers turn their paid time off into loan payments
arl Gagnon is assistant vice
president of global financial
well-being and retirement
programs at Unum, a provider of disability,
life, accident, critical illness,
dental and vision workplace benefits,
in Chattanooga, Tennessee. Part of
his role is to lead a working group at
the company looking into the problem
of student debt. He says he believes
monthly student loan payments have
left Unum employees struggling to
build emergency savings or to squirrel
away enough in their 401(k).
To address that challenge, the
working group first considered the
resources available that could help
the company's employees consolidate
their student loans. Combining
a worker's loans in this way would,
for instance, eliminate his highinterest
loan, letting him pay it off at
a lower rate. Unum helped pilot and
then implemented Fidelity's Student
" We created the program
working with Fidelity Investments,
one of our key financial vendors
that we utilize for all of our 401(k)
programs and stock purchase plans, "
Gagnon says. " We asked them to
implement it with a jointly managed
Unum/Fidelity website. "
Right after the holidays, he
explains, all full-time employees who
have elected to make the trade will
receive an email from Unum telling
them how many hours they have
carried over and the cash equivalent.
The email also provides a link they
will follow to register their information
for one or multiple student loans
and assign all or part of that PTO
carry-over to the repayment.
At the end of the eligibility period,
Carl Gagnon, assistant vice president of global
financial well-being at Unum
Debt Tool, which enables borrowers to see what they owe by
aggregating all of their federal and private student loans in one
place. It also provides borrowers with suggestions relating to
loan refinancing and re-amortization.
Unum initiated its Student Debt Relief Program this
year after working on it for the past two. " The program allows
employees to transfer up to 40 hours of paid time off [PTO]
carry-over, if they have any at the end of the calendar year, " into
dollars to put toward student loans, Gagnon says.
This coming January, Unum workers will have a window
during which they may trade PTO back to the company at their
respective hourly rate. The offer is available to any U.S. employee
who has student debt, including parents who have taken out
education loans such as PLUSes [parent loans for undergraduate
students] or have co-signed loans.
SNAPSHOT
PLAN SPONSOR
Unum,
Chattanooga,
Tennessee
KEY PLAYER
Carl Gagnon, assistant
vice president of global
financial well-being
PLAN
401(k)
Fidelity will send Unum a communication
listing the employees who
have taken up the benefit, and Unum
will then wire that money to Fidelity.
Fidelity then pays the loan providers and sends a confirmation to
Unum and the employee to verify the payments have been made.
Gagnon says, " Within the company, we estimate around
2,000 to 2,500 people are carrying student debt for themselves
or their loved ones, and the magic question is how many people
will enroll? We're thinking around 800 to 1,000, but we won't
know until the enrollment window ends in January.
" One critical component of this is the long-standing competitive
PTO package we offer employees, " he says. " At the first year
of employment at Unum, employees get 28 days of PTO, which
is nearly double the national average. "
He notes that Unum's philosophy is to offer employees a
choice. If the person values his PTO and manages his debt, he
does not have to sign up for this-he can carry time over as PTO.
-Judy Faust Hartnett
NUMBER OF
PARTICIPANTS
9,400
PARTICIPATION
RATE
90%
PLAN
ASSETS
$1.9b
AVERAGE
DEFERRAL RATE
7.9%
48 PLANSPONSOR.COM December 2019 - January 2020
Art by Chris Buzelli
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PLANSPONSOR - December/January 2020

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