Apart from the changes proposed from the BBA, the IRS also issued a private ruling earlier this summer that demonstrated a willingness to allow “matching” contributions to be made on behalf of employees who are making qualifying student loan payments but not contributing to the retirement plan. The benefit of this private ruling would be for those who are burdened by their student loan debt and are therefore unable to save for retirement.

While this ruling was private, it gives an indication of what the IRS thinks about various options and could provide employers with a student loan-based incentive program that can be used to attract and retain talented employees. Contributions under this program are tax-deferred for the employee and tax deductible for the employer.

Whereas a private letter ruling was issued, please note this feature may not be generally available or applicable within your provider’s document. AFS will continue to monitor and update as necessary on this topic. In the interim, sponsors should not make any changes to their employer match administration practices without first consulting with an experienced ERISA specialist.

Securities offered through Kestra Investment Services, LLC (Kestra IS), member FINRA/SIPC. Investment advisory services offered through Kestra Advisory Services, LLC (Kestra AS), an affiliate of Kestra IS. Assurance Financial Services, Ltd (AFS) and Assurance Agency, Ltd (Assurance) are not affiliated with Kestra IS or Kestrra AS. AFS is a wholly owned subsidiary of Assurance.