The Internal Revenue Service issued interim guidance on employer matching contributions made to retirement plans related to qualified student loan payments (QSLPs) made by employees.

The guidance, Notice 2024-83 addresses issues that may arise for 401(k), 403(b), governmental 457(b), or SIMPLE IRA plans in administering such matching contributions.

Section 110 of the SECURE 2.0 Act of 2022 allows plan sponsors to provide matching contributions based on student loan payments, rather than based only on salary deferrals, in plan years beginning after Dec. 31, 2023.

Notice 2024-63 applies for plan years beginning after Dec. 31, 2024.

For a qualified education loan to be treated as incurred by an employee, the employee who makes a payment on the qualified education loan must have a legal obligation to make the payment under the terms of the loan. Under the guidance, a plan may not include provisions that limit QSLP matches to only certain qualified education loans, such as qualified education loans for an employee’s education, for a particular degree program, or attendance at a particular school. In addition, a QSLP match contributed for a plan year may not be based on a qualified education loan payment that was made during a different plan year. A QSLP match feature may be added as a mid-year change to a safe harbor plan.