Hayden Beverage Company introduced a new benefit for its employees this summer: matching employee contributions to college savings accounts.
The move makes Hayden Beverage the first corporation in the state to match employee contributions to IDeal, Idaho’s state sponsored college savings program, through a plan called “529 Boost.”
“This will be, I believe, one of very few employers nationally that is doing this,” said Christine Stoll, executive director of IDeal. “This is a really big deal.”
Idaho taxpayers who put money into an IDeal savings account — also called a “529 account” — qualify for a state tax deduction. Money in the account accrues over time and the funds can only be used to pay for a beneficiaries’ education-related expenses — including college and trade school expenses, or K-12 private tuition.
Dodds Hayden, CEO of Hayden Beverage, sits on the board of Idaho Businesses for Education — a group of business leaders aimed at boosting the number of Idaho high school graduates who enter the workforce with some postsecondary education.
It was at an IBE meeting that Hayden first heard that employers could contribute to college savings accounts for their children and relatives. The idea struck him as an “obvious” investment.
“As I try to think about what are different ways we can make our employees’ lives better, certainly one of those is helping each generation move a little farther as far as education goes,” Hayden said.
The benefits of the program are many, advocates say. Employers can help more Idahoans send their kids to college. That, in turn, helps boost the education level of the state workforce. Offering to match college savings could also be a recruiting benefit, Hayden says.
“The benefit of it, and other plans, is how do we continue to keep Idaho’s education moving forward?” Hayden said. “…The more companies in Idaho that do this, the better our population will be served by having a more educated populace.”
The 529 Boost program is meant to be flexible, Stoll said. Employers set their own terms for which employees qualify and decide how much they want to match.
Hayden Beverage’s plan, for example, will match employee contributions made to an Ideal 529 account through payroll direct deposit. The current policy says Hayden Beverage will match up to $5,000 per employee, per year. The accounts, Hayden said, must be for an employee’s child, or a child for whom the employee is a legal guardian.
Rod Gramer, president and CEO of Idaho Businesses for Education, is encouraging other companies across the state to consider following Hayden’s lead.
In Idaho, Gramer said, affordability is a major barrier to a student’s ability to go to college — and only a small percent of Idaho’s kids have an IDeal college savings account set up in their name.
“If employers can set up 529’s for their employees — and especially if they can match those 529 contributions — it will make a huge difference for Idaho in terms of the number of kids who have the financial resources to get a postsecondary education,” Gramer said.