Benefits January 26, 2024

Chipotle Partners With SoFi to Offer Student Loan Matching Program

The Mexican-style chain restaurant will offer a student loan repayment matching benefit, as well as mental health and financial education resources, to support its growing Gen Z workforce.

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In order to support its growing Generation Z workforce, Chipotle Mexican Grill Inc. announced Tuesday that it will partner with SoFi to provide a new employee assistance program, featuring student loan benefits, access to mental health resources and more. 

Through SoFi’s Student Loan Verification service, once an employee becomes eligible for Chipotle’s 401(k) plan match, the company will match up to 4% of an employee’s salary through contributions to their retirement account if the employee makes eligible student loan repayments. 

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The Chipotle Mexican Grill Inc. 401(k) plan has more than $183 million in assets, according to its 2022 Form 5500 filing. 

According to SoFi, the benefit solution launched in response to the SECURE 2.0 Act of 2022’s student loan matching provision, which went into effect January 1 of this year, which allows employers to provide matching retirement contributions for qualified student loan repayments.  

SoFi and Chipotle were introduced via Alliant and Principal, Chipotle’s benefits broker and recordkeeper, respectively, according to a spokesperson at SoFi at Work. Through its SoFi at Work platform, SoFi has an existing strategic partnership with Principal, dating back 2021.  

SoFi at Work cited a 2019 study from MIT, which found that 84% of adults who carry student loan debt say it has impacted how much they can save for retirement. When it came to those who had not saved for retirement, more than one in four respondents said it was because they had to put their money toward paying off student loans. 

In addition, Chipotle employees will have access to a debit card created by Cred.ai, allowing them to have payroll funds deposited into a bank account, with those funds available via the debit card to make purchases and build credit with no fees or interest. A Chipotle spokesperson said in an emailed response that the “high-tech” Visa card offers security features, faster access to paychecks and Cred.ai’s “Credit Optimizer”—an algorithm the card uses to optimize users’ credit utilization, so people do not overspend and damage their credit score.  

As more than 73% of Chipotle’s restaurant employees are part of Gen Z, SoFi argued that these new benefits cater to the challenges people in that cohort are facing. In addition to student loan debt, many Gen Z employees face credit card debt that is growing at a faster rate than previous generations, according to Credit Karma. 

American credit card balances hit a record $1 trillion last year, according to a report from the Federal Reserve Bank of New York. 

Chipotle’s partnership with SoFi will also provide employees access to the SoFi at Work Dashboard, which includes an assessment of the user’s current financial outlook, as well as other financial education tools and materials. 

Chipotle’s new Employee Assistance Program, powered by the financial wellness platform SupportLinc, focuses on employee mental and emotional well-being. Through the platform, Chipotle employees will have access to six free sessions with a licensed counselor, as well as tools, resources and community support for legal, financial and family matters. 

Beyond the 110,000 employees that currently work at Chipotle restaurants across the country, the company has announced it is looking to hire 19,000 additional employees for its upcoming “burrito season,” which the company identifies as from March through May, its  busiest time of year.  

According to the company, Chipotle promoted more than 26,000 employees in 2023, and crew members can advance to “Restaurateur” status in three and a half years. At that level, they can earn a total compensation package of approximately $100,000. 

Products January 25, 2024

Investment Product and Service Launches

Fidelity takes 401(k)-to-annuity platform national; Prudential announces Fidelity-related SimplyIncome annuity solution; Betterment launches small business student loan 401(k) matching program; and more.

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Fidelity Goes National With 401(k)-to-Income Annuity Offering 

Fidelity Investments has added another option for an annuity-driven “pension-like” paycheck from defined contribution retirement plans. 

Fidelity’s Guaranteed Income Direct, now available to plan sponsors nationally after it was initially presented by the firm in 2021, gives participants an option to convert 401(k), 403(b) or 457(b) savings into an immediate income annuity that will produce a steady paycheck in retirement—solving for the oft-discussed decumulation problem among employer plan participants and American savers. 
 

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The offering gives participants the choice of purchasing an income annuity directly through an employer’s plan benefit from a third-party insurer selected by the employer, according to an emailed response from Keri Dogan, Fidelity’s senior vice president of financial wellness and retirement income solutions. Those assets leave the retirement plan and go to the insurer for purchase, with monthly cash flow views available through the benefits platform, NetBenefits. 
 
“This process benefits the participant by avoiding any possible portability issues,” Dogan explains, noting also that “the participant can view information on the third-party insurers selected by their employer in order to make an informed decision on their purchase.” 
 
Plan sponsors will not have a charge associated with adding the services, though fees may be charged for amending plan documents to allow for an annuity as a distribution option. The platform currently includes annuity options fromMetLife, Pacific Life, Prudential Financial and Western & Southern Financial Group, with more to be added in the future, according to the announcement. Fidelity partnered with Micruity Inc., a clearinghouse for annuity-related data, to create the digital platform. 

Prudential Announces SimplyIncome for Workplace Plans 

In a separate announcement from Fidelity, Prudential Financial Inc. noted the launch of SimplyIncome, a single-premium immediate annuity, or SPIA, for employer-based retirement programs being administered by Fidelity.  

Prudential is one of multiple insurers on Fidelity’s Guaranteed Income Direct platform, with its offering going to more than 100,000 plan participants, according to Prudential.  

Ann Nanda, head of future growth initiatives and distribution enablement at Prudential Retirement Strategies, noted that the collaboration with Fidelity helps expand access to retirement security for more consumers and aligns with a key Prudential business priority to deliver retirement income in new ways. 

“Prudential SimplyIncome is an example of how we are co-creating innovative solutions for employer-based retirement plans, in this case working with a top plan administrator to bring a protected income option to plan sponsors and participants within a system they already know,” Nanda said in a statement.  

Prudential makes more than $12 billion in protected income payments to customers every year. 

Betterment at Work Launches Small Business Student Loan 401(k) Matching  

Financial benefits provider Betterment at Work has launched a platform for small businesses to provide employees with a 401(k) company match to the employees’ student loan repayments if they are using Betterment’s 401(k) services.  

The benefits offering allows qualified student loan repayments to count as elective deferrals that are eligible for a company match from a small employer. Employees with access to Betterment’s 401(k) can record their loan payments within the platform, according to the firm. Employers can choose to make the match annually, even if education debt payments are made on a per-payroll basis.  

“We know that student debt can be a major impediment to saving for retirement,” Sarah Levy, Betterment’s CEO, said in a statement. “Our industry-first student loan 401(k) matching solution is a compelling addition to our modern 401(k) that will help to broaden plan participation to those whose student debt previously kept them from saving for retirement.” 

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