Employers May Now Make Matching Contributions for Student Loan Payments

In an effort to assist employees who may not be able to save for retirement because they are overwhelmed with student loan debt, as of January 1, 2024, Section 110 of SECURE 2.0 permits an employer to make matching contributions under a 401(k) plan, 403(b) plan, or SIMPLE IRA with respect to “qualified student loan payments.”

A qualified student loan payment is broadly defined as any indebtedness incurred by the employee solely to pay qualified higher education expenses of the employee. Governmental employers are also permitted to make matching contributions in a section 457(b) plan or another plan with respect to such repayments. Section 110 is effective for contributions made for plan years beginning after December 31, 2023.