On August 19, the Internal Revenue Service (IRS) released new guidance, Notice 2024-63, that explains how employers can treat their employees’ student loan payments as retirement plan deferrals, and match them under the employer match terms of their retirement plans. The guidance implements the provision in SECURE 2.0 which Congress enacted into law last year.

The interim guidance requires employer matching contributions tied to student loan repayments to be made at the same rate and under the same vesting schedule as a plan’s regular match. It also includes eligibility rules as well as rules on what an employee must do to certify that their student loan matching contribution requirements have been met and that their student loan payments have been made. In addition, the guidance states that an employer that voluntarily offers a match for student loan payments may choose to apply a single nondiscrimination standard for all employees, or separate tests for employees who receive student loan matching contributions and for those whose matching contributions are regular deferrals.

Notice 2024-63 applies to plan years beginning after December 31, 2024.

Prospects: The IRS says the agency plans to issue proposed regulations on student loan matching payments. The agency has requested further comments on the issue, including on issues related to passive certifications or independent verification, and a range of other qualified student loan payment (QSLP) match issues. The timing of the new proposed regulations is uncertain.

NAIFA Staff Contact: Jayne Fitzgerald – Director – Government Relations, at jfitzgerald@naifa.org.