Invoice pending permitting applicable pension plan contributions for pupil mortgage funds
A bill that would allow workers to pay student loans while their employers make equivalent contributions to their defined contribution accounts was reintroduced in the Senate Thursday.
The Student Loan Equal Age Act allows employers to make equivalent contributions to employee retirement plans 401 (k), 403 (b) and SIMPLE, and 457 (b) as if their student loan payments were contributions to a salary cut. “This allows these workers to build up their retirement assets even while they are paying off their student loan debts and cannot afford to make their own contributions to the plan,” reads one legislative summary.
The bill would amend the 1986 Internal Revenue Code to allow, among other things, the treatment of student loan payments as an option deferral for the purpose of employer matching contributions.
The benefit only applies to the repayment of student loan debts that an employee has incurred for college expenses. An employee must certify the amount of student loan repayments made during a plan year in order to receive the benefit according to the invoice summary.
Americans need to be able to save for retirement even as they repay their loans, Senator Ron Wyden, D-Ore., Chairman of the Senate Finance Committee, said in an accompanying press release. “While I support student debt relief, it’s important to put every option on the table to ease that burden for millions of Americans,” he said. “This calculation is an important tool in the toolbox.”
Mr Wyden first introduced the bill in 2019 and similar laws introduced in-house in 2020. The current version is co-sponsored by Sens. Maria Cantwell, D-Wash., Sheldon Whitehouse, DR. I., Sherrod Brown, D., -Ohio and Ben Cardin, D-Md.