3713.10 / What should small business clients know about the SECURE Act 2.0 student loan match option?

Planning Point: Not all payments are eligible—so it’s important for employers to understand the details of what constitutes a qualified student loan payment.

Typically, employers make matching contributions to employer-sponsored retirement plans based on the participant’s elective deferrals to the plan. For example, an employer may offer a 50 percent matching contribution up to 5 percent of the employee’s salary. So, for every dollar the employee contributes, the employer contributes an additional 50 cents—up to the compensation limit.

Historically, employees have only received this benefit if they have the funds to contribute to the account.

Beginning in 2024 and beyond, employers will also be entitled to make matching contributions to an employer-sponsored retirement plan based on an employee’s qualified student loan payments—even if the employee does not directly contribute to the retirement plan.