LDR6000 Deliverable 1 – Discretionary Benefit White Paper

Discretionary Benefit White Paper

Student Name

Rasmussen University

LDR 6000 Rewards System Management

Prof. Name

Submission Date

Introduction

The Chief HR Officer is working to reinforce and develop a full rewards system consistent with increasing concerns about retaining millennial performers (Cappelli, 2020). This is happening in the context of increasing challenges that the organization is facing in relation to the retention of the key personnel group. The Chief HR Officer realises that some strategic interventions are needed and draws up and presents to the CEO and COO a plan indicating the key elements of the new total rewards system.

He is thinking about this so he can do a better job of keeping them around. This white paper is an in-depth exploration of the concept of incorporating a student loan repayment program into the organization’s menu of voluntary benefits. In addition, the basic project of thinking about the total reward system as a beneficial offer will be almost perfect without knowing the details, advantages, and disadvantages.

This paper will try not only to describe in detail the program of student loan repayment but also to do a mathematical analysis to find out its conformity with the current program, review the fundamentals of taxation and retirement of the repayment program, and, at the end, categories the program based on its pros and cons for both the employee and the employer. Finally, the white paper will result in a recommendation that the CRO implement this into the overall rewards program, and this will be supported by data-driven arguments derived from extensive analysis and research.

Student Loan Repayment Program

An employer’s student loan repayment program demonstrates to employees that, through benefits, they have a choice to receive support from the employer to pay back their student loan debt (Stivers & Berman, 2020). Usually, the company is more likely to provide the employee with student loan debt repayments as a lump sum or in excess amounts when needed. It can be focused on basic knowledge or work-level advanced topics. This program is so diverse that it has to be based on the employer’s choice in the budgeting stage.

Other programs may have a position, length of service with the company, or specific requirements set by the employer that would make the number of employees eligible to participate in the program smaller. Some other programs may have some requirements, like having a job, working for a certain amount of time, or some specific requirement from the employer that would limit who can participate in the program.

Implementation Options

Here are some very different choices for implementing a student debt repayment program. This can be done by making a payment to the student loan servicer on behalf of the employee, reimbursing the employee for the payment made by the employee, or matching the employee’s repayments with a contribution from the employer (Mapa Mudiyanselage et al., 2023). Employers can opt for other structures, like a fixed amount or a variable amount as a percentage of their payroll. The program baseline may also contain eligibility criteria, conditions, and limits on the maximum financial assistance.

Eligibility Criteria

Generally, those who are currently employed by the company should be considered eligible for any assistance that may be required.
Other companies might need the employee to work for them for a minimum of a year before the plan can be offered.
Employees will be required to demonstrate they are current on their reimbursable loan in order to be eligible for the assistance program.
Only employees in certain types of jobs or job grades, as determined by the organization chart, will be given the opportunity by the employers.
Apart from the pass marks set, workers may have additional commitments such as financial requirements.
Look at the similarities and differences between different types of discretionary benefits.

Comparison of Different Forms of the Discretionary Benefit

Contribution of the employer

Employer contribution placement is an important concept in SLPN, and can be in various shapes and amounts of contribution. The employer can decide to make an order that appears as a contribution directly to the employee’s student loan account, or it can provide the employee with reimbursement of loan payments made, or the employer can provide a matching plan, such as a contribution paid when the employee makes loan payments (Strich et al., 2021).

Investment allowances are policy provisions that allow use of employers that can directly invest their employer funds with the loan servicer, which then reduces the loan debt balance of the employee. Reimbursement programs require the employee to pay the student loan, and the employer to verify the documents accordingly. Combinatory contributions consist of the employer paying 50/50 of the employee’s loan payment, up to a limit.

Employee Eligibility and Participation

All loan repayment programs are limited in productivity and quality of participation due to criteria such as employee eligibility and participation. Certain employees may be exempted from being hired based on employment status (temp vs permanent), length of service, loan status, type of job, and other specified reasons (Akbar, 2022).

The rules for eligibility should be made known transparently to employers to avoid misunderstanding or inequality in the participation of disadvantaged groups. Employers may also provide for general participation rules for the purpose of setting out the conditions of employee participation in the program, including the time during which employees must participate, the amount they may contribute, and the eligibility for participation.

Conclusion

In summary, this white paper discusses the many subtle components of a student loan repayment program that may be included as part of the overall compensation framework within the organization. We have discussed the pros and cons for employees and the corporation, considered the impact on regulatory and compliance requirements, and have offered recommendations that can be utilized when the Chief HR Officer is considering the issue.

Through a student loan repayment benefit, organizations can assert their determination for employees’ well-being, recruit the best minds, and build a workable culture. With that said, evaluations are a crucial factor in making savvy choices among the financial considerations, eligibility requirements, and compliance with IRS rules.

References

Abdollahpouri, H., Adomavicius, G., Burke, R., Guy, I., Jannach, D., Kamishima, T., Krasnodebski, J., & Pizzato, L. (2020). Multistakeholder recommendation: Survey and research directions. User Modeling and User-Adapted Interaction, 30(1), 127–158. https://doi.org/10.1007/s11257-019-09256-1

Cappelli, L. (2020). An investigation into the best practices of retaining millennials in the financial sector. Esource.dbs.ie. https://esource.dbs.ie/items/cef174df-df50-45bc-b3af-10f0e7602b4f

Goldstein, A., Eaton, C., Villalobos, A., Chakrabarti, P., Cohen, J., & Donnelly, K. (2023). Administrative burden in federal student loan repayment, and socially stratified access to income-driven repayment Plans. RSF: The Russell Sage Foundation Journal of the Social Sciences, 9(4), 86–111. https://doi.org/10.7758/RSF.2023.9.4.04

Gutterman, P. (2023, August 31). Employee handbooks and policies. Social Science Research Network. https://doi.org/10.2139/ssrn.4557967

Lin, D., Burik, T., Cross, T., & Jeszeck, C. A. (2020, February 28). Private pensions: IRS and DOL should strengthen oversight of executive retirement plans. Ssrn.com. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3545975

Loganathan, T., Chan, Z. X., & Pocock, N. S. (2020). Healthcare financing and social protection policies for migrant workers in Malaysia. PLOS ONE, 15(12), e0243629. https://doi.org/10.1371/journal.pone.0243629

Stivers, A., & Berman, E. P. (2020). Parents, partners, plans, and promises: The relational work of student loan borrowing. Socius: Sociological Research for a Dynamic World, 6, 237802312091500. https://doi.org/10.1177/2378023120915003

Strich, F., Mayer, A.-S., & Fiedler, M. (2021). What do I do in a world of artificial intelligence? Investigating the impact of substitutive decision-making AI systems on employees’ professional role identity. Journal of the Association for Information Systems, 22(2), 304–324. https://doi.org/10.17705/1jais.00663