The IRS has released interim guidance for sponsors of 401(k) and similar retirement plans who wish to offer matching contributions based on employees’ student loan payments. This is made possible by Section 110 of the SECURE 2.0 Act of 2022, which, starting in 2024, allows employers to match student loan payments with retirement contributions, expanding beyond traditional retirement contributions alone.
Outlined in Notice 2024-63, this guidance covers key aspects for plan sponsors, such as eligibility rules for student loan matches, required employee certifications, and reasonable procedures for implementing these contributions. Additionally, it provides special nondiscrimination testing relief for 401(k) plans offering student loan matches.
The IRS notice, formatted in a Q&A style and including examples, serves as a temporary reference until formal regulations are issued. Employers and interested parties are invited to provide feedback on this interim guidance, with instructions for comments provided in the notice.
