[Congressional Bills 117th Congress]
[From the U.S. Government Publishing Office]
[S. 1443 Introduced in Senate (IS)]
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117th CONGRESS
1st Session
S. 1443
To amend the Internal Revenue Code of 1986 to permit treatment of
student loan payments as elective deferrals for purposes of employer
matching contributions, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
April 29, 2021
Mr. Wyden (for himself, Mr. Brown, Ms. Cantwell, Mr. Cardin, and Mr.
Whitehouse) introduced the following bill; which was read twice and
referred to the Committee on Finance
_______________________________________________________________________
A BILL
To amend the Internal Revenue Code of 1986 to permit treatment of
student loan payments as elective deferrals for purposes of employer
matching contributions, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Retirement Parity for Student Loans
Act''.
SEC. 2. TREATMENT OF STUDENT LOAN PAYMENTS AS ELECTIVE DEFERRALS FOR
PURPOSES OF MATCHING CONTRIBUTIONS.
(a) In General.--Subparagraph (A) of section 401(m)(4) of the
Internal Revenue Code of 1986 is amended by striking ``and'' at the end
of clause (i), by striking the period at the end of clause (ii) and
inserting ``, and'', and by adding at the end the following new clause:
``(iii) subject to the requirements of
paragraph (13), any employer contribution made
to a defined contribution plan on behalf of an
employee on account of a qualified student loan
payment.''.
(b) Qualified Student Loan Payment.--Paragraph (4) of section
401(m) of the Internal Revenue Code of 1986 is amended by adding at the
end the following new subparagraph:
``(D) Qualified student loan payment.--The term
`qualified student loan payment' means a payment made
by an employee in repayment of a qualified education
loan (as defined in section 221(d)(1)) incurred by the
employee to pay qualified higher education expenses,
but only--
``(i) to the extent such payments in the
aggregate for the year do not exceed an amount
equal to--
``(I) the limitation applicable
under section 402(g) for the year (or,
if lesser, the employee's compensation
(as defined in section 415(c)(3)) for
the year), reduced by
``(II) the elective deferrals made
by the employee for such year, and
``(ii) if the employee certifies to the
employer making the matching contribution under
this paragraph that such payment has been made
on such loan.
For purposes of this subparagraph, the term `qualified
higher education expenses' means the cost of attendance
(as defined in section 472 of the Higher Education Act
of 1965, as in effect on the day before the date of the
enactment of the Taxpayer Relief Act of 1997) at an
eligible educational institution (as defined in section
221(d)(2)).''.
(c) Matching Contributions for Qualified Student Loan Payments.--
Subsection (m) of section 401 of the Internal Revenue Code of 1986 is
amended by redesignating paragraph (13) as paragraph (14), and by
inserting after paragraph (12) the following new paragraph:
``(13) Matching contributions for qualified student loan
payments.--
``(A) In general.--For purposes of paragraph
(4)(A)(iii), an employer contribution made to a defined
contribution plan on account of a qualified student
loan payment shall be treated as a matching
contribution for purposes of this title if--
``(i) the plan provides matching
contributions on account of elective deferrals
at the same rate as contributions on account of
qualified student loan payments,
``(ii) the plan provides matching
contributions on account of qualified student
loan payments only on behalf of employees
otherwise eligible to receive matching
contributions on account of elective deferrals,
``(iii) under the plan, all employees
eligible to receive matching contributions on
account of elective deferrals are eligible to
receive matching contributions on account of
qualified student loan payments, and
``(iv) the plan provides that matching
contributions on account of qualified student
loan payments vest in the same manner as
matching contributions on account of elective
deferrals.
``(B) Treatment for purposes of nondiscrimination
rules, etc.--
``(i) Nondiscrimination rules.--For
purposes of subparagraph (A)(iii), subsection
(a)(4), and section 410(b), matching
contributions described in paragraph
(4)(A)(iii) shall not fail to be treated as
available to an employee solely because such
employee does not have debt incurred under a
qualified education loan (as defined in section
221(d)(1)).
``(ii) Student loan payments not treated as
plan contribution.--Except as provided in
clause (iii), a qualified student loan payment
shall not be treated as a contribution to a
plan under this title.
``(iii) Matching contribution rules.--
Solely for purposes of meeting the requirements
of paragraph (11)(B) or (12) of this
subsection, or paragraph (11)(B)(i)(II),
(12)(B), or (13)(D) of subsection (k), a plan
may treat a qualified student loan payment as
an elective deferral or an elective
contribution, whichever is applicable.
``(iv) Actual deferral percentage
testing.--In determining whether a plan meets
the requirements of subsection (k)(3)(A)(ii)
for a plan year, the plan may apply the
requirements of such subsection separately with
respect to all employees who receive matching
contributions described in paragraph
(4)(A)(iii) for the plan year.
``(C) Employer may rely on employee
certification.--The employer may rely on an employee
certification of payment under paragraph (4)(D)(ii).''.
(d) Simple Retirement Accounts.--Paragraph (2) of section 408(p) of
the Internal Revenue Code of 1986 is amended by adding at the end the
following new subparagraph:
``(F) Matching contributions for qualified student
loan payments.--
``(i) In general.--Subject to the rules of
clause (iii), an arrangement shall not fail to
be treated as meeting the requirements of
subparagraph (A)(iii) solely because under the
arrangement, solely for purposes of such
subparagraph, qualified student loan payments
are treated as amounts elected by the employee
under subparagraph (A)(i)(I) to the extent such
payments do not exceed--
``(I) the applicable dollar amount
under subparagraph (E) (after
application of section 414(v)) for the
year (or, if lesser, the employee's
compensation (as defined in section
415(c)(3)) for the year), reduced by
``(II) any other amounts elected by
the employee under subparagraph
(A)(i)(I) for the year.
``(ii) Qualified student loan payment.--For
purposes of this subparagraph--
``(I) In general.--The term
`qualified student loan payment' means
a payment made by an employee in
repayment of a qualified education loan
(as defined in section 221(d)(1))
incurred to pay qualified higher
education expenses, but only if the
employee certifies to the employer
making the matching contribution that
such payment has been made on such a
loan.
``(II) Qualified higher education
expenses.--The term `qualified higher
education expenses' has the same
meaning as when used in section
401(m)(4)(D).
``(iii) Applicable rules.--Clause (i) shall
apply to an arrangement only if, under the
arrangement--
``(I) matching contributions on
account of qualified student loan
payments are provided only on behalf of
employees otherwise eligible to elect
contributions under subparagraph
(A)(i)(I), and
``(II) all employees otherwise
eligible to participate in the
arrangement are eligible to receive
matching contributions on account of
qualified student loan payments.''.
(e) 403(b) Plans.--Subparagraph (A) of section 403(b)(12) of the
Internal Revenue Code of 1986 is amended by adding at the end the
following: ``The fact that the employer offers matching contributions
on account of qualified student loan payments as described in section
401(m)(13) shall not be taken into account in determining whether the
arrangement satisfies the requirements of clause (ii) (and any
regulation thereunder).''.
(f) 457(b) Plans.--Subsection (b) of section 457 of the Internal
Revenue Code of 1986 is amended by adding at the end the following: ``A
plan which is established and maintained by an employer which is
described in subsection (e)(1)(A) shall not be treated as failing to
meet the requirements of this subsection solely because the plan, or
another plan maintained by the employer which meets the requirements of
section 401(a), provides for matching contributions on account of
qualified student loan payments as described in section 401(m)(13).''.
(g) Regulatory Authority.--The Secretary of the Treasury (or such
Secretary's delegate) shall prescribe regulations for purposes of
implementing the amendments made by this section, including
regulations--
(1) permitting a plan to make matching contributions for
qualified student loan payments, as defined in sections
401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of
1986, as added by this section, at a different frequency than
matching contributions are otherwise made under the plan,
provided that the frequency is not less than annually;
(2) permitting employers to establish reasonable procedures
to claim matching contributions for such qualified student loan
payments under the plan, including an annual deadline (not
earlier than 3 months after the close of each plan year) by
which a claim must be made; and
(3) promulgating model amendments which plans may adopt to
implement matching contributions on such qualified student loan
payments for purposes of sections 401(m), 408(p), 403(b), and
457(b) of the Internal Revenue Code of 1986.
(h) Effective Date.--The amendments made by this section shall
apply to contributions made for years beginning after December 31,
2021.
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