IRS OKs student loan debt reduction program linked to 401(k)s

Description

Abstract: Student loan debt can be a significant deterrent to many employees’ retirement savings efforts. Combining student debt payment support with a 401(k) plan is a tricky business. But one employer managed to navigate ERISA restrictions to combine tuition repayment and 401(k) plan benefits in a way that passed muster with the IRS. This article summarizes a recent private letter ruling in which the IRS gave its approval to an employer whose plan was subsequently rolled out to employees. “Contingent benefit” rule, 26 USC 401(k)(4)(A), 26 CFR 1.401(k)-1(e)(6). PLR 201833012.