Abbott’s Innovative Freedom 2 Save Program: Balancing Student Loans and Retirement Savings
In 2023, Fortune magazine released its “Change the World” list, acknowledging corporations that have made significant social or environmental contributions through their primary business practices and operations. Abbott was featured on this prestigious list for its innovative Freedom 2 Save initiative, a program designed to assist Abbott’s employees in managing their student loans while simultaneously saving for retirement.
Abbott, which employs over 35,000 people in the U.S., many of whom are burdened with student loans, introduced the Freedom 2 Save program in 2018. This unique initiative allows Abbott employees to allocate 2% of their eligible pay towards their student loans and receive a corporate match of 5% of their eligible pay into their 401(k)s.
The program eliminates the need for employees to choose between paying off their student loans or saving for retirement. Furthermore, employees are not required to contribute any money to their retirement fund to receive this match. Since the program’s launch, over 2,500 employees have enrolled, and Abbott has contributed more than $5.5 million to these employees’ 401(k)s, including $1.7 million in 2022 alone.
As part of Abbott’s 2030 Sustainability Plan, which aims to foster a diverse and innovative workforce, the company has pledged to provide $10 million in matching contributions to Freedom 2 Save participants’ retirement accounts by 2030.
The Freedom 2 Save program was so groundbreaking that Abbott had to obtain special permission from the IRS to implement it. Starting in January 2024, thanks to a provision in the SECURE 2.0 Act signed into law in December 2022, U.S. employers will find it easier to offer a benefit similar to Freedom 2 Save. This provision allows employers to match employees’ student loan payments with contributions to their 401(k)s.
This is the third time Abbott has been recognized by Fortune’s “Change the World” list. In previous years, the company was honored for its efforts in expanding access to quality primary care and diagnostic testing in Rwanda, advancing innovative testing for COVID-19, and supporting dairy farmers in India through a shared value program that helped increase their incomes and strengthen Abbott’s nutrition supply chain.
Abbott, which employs over 35,000 people in the U.S., many of whom are burdened with student loans, introduced the Freedom 2 Save program in 2018. This unique initiative allows Abbott employees to allocate 2% of their eligible pay towards their student loans and receive a corporate match of 5% of their eligible pay into their 401(k)s.
The program eliminates the need for employees to choose between paying off their student loans or saving for retirement. Furthermore, employees are not required to contribute any money to their retirement fund to receive this match. Since the program’s launch, over 2,500 employees have enrolled, and Abbott has contributed more than $5.5 million to these employees’ 401(k)s, including $1.7 million in 2022 alone.
As part of Abbott’s 2030 Sustainability Plan, which aims to foster a diverse and innovative workforce, the company has pledged to provide $10 million in matching contributions to Freedom 2 Save participants’ retirement accounts by 2030.
The Freedom 2 Save program was so groundbreaking that Abbott had to obtain special permission from the IRS to implement it. Starting in January 2024, thanks to a provision in the SECURE 2.0 Act signed into law in December 2022, U.S. employers will find it easier to offer a benefit similar to Freedom 2 Save. This provision allows employers to match employees’ student loan payments with contributions to their 401(k)s.
This is the third time Abbott has been recognized by Fortune’s “Change the World” list. In previous years, the company was honored for its efforts in expanding access to quality primary care and diagnostic testing in Rwanda, advancing innovative testing for COVID-19, and supporting dairy farmers in India through a shared value program that helped increase their incomes and strengthen Abbott’s nutrition supply chain.
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