08.27.24

IRS Issues FAQs on Student Loan Repayment Matching in Retirement Plans

by: John Manganaro

The IRS has released long-awaited interim guidelines regarding Section 110 of the Setting Every Community Up for Retirement Enhancement 2.0 Act, which permits employers with 401(k), 403(b), governmental 457(b), or Savings Incentive Match Plan for Employees (SIMPLE) IRA plans to match employees’ student loan payments like they would for traditional retirement contributions. The provision took effect this year, but employers have been waiting for more guidance around the new program. In Notice 2024-63, the IRS clarified eligibility rules and certification requirements in a Q&A format. The guidance applies for plan years beginning after Dec. 31, 2024, the agency said. Employees have been looking for help from their employers on balancing their financial needs. A growing number of employers have added student loan benefits, though it is still not a widespread offering. According to the 2024 SHRM Employee Benefits Survey, 9% of employers currently offer student loan repayment, up from 8% in 2023. The guidance clarifies that a plan may require a separate certification for each qualified education loan payment intended to qualify as a qualified student loan payment (QSLP) or permit an annual certification that applies for all qualified education loan payments intended to qualify as QSLPs for a year.

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