[Congressional Record Volume 167, Number 74 (Thursday, April 29, 2021)]
[Senate]
[Pages S2357-S2358]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]
By Mr. WYDEN (for himself, Mr. Brown, Ms. Cantwell, Mr. Cardin,
and Mr. Whitehouse):
S. 1443. 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; to the
Committee on Finance.
Mr. WYDEN. Madam President, today I have introduced the Retirement
Parity for Student Loans Act. This legislation would permit employers
to make matching contributions to workers under 401(k) and similar
types of retirement plans as if a worker's student loan payments were
salary reduction contributions to the retirement plan. This legislation
will help workers who cannot afford to both save for retirement and pay
off their student loan debt by providing them with employer
contributions to build their retirement savings. This legislation is a
common sense fix to the rules that govern employer-sponsored retirement
plans and I urge my colleagues to support this legislation. I ask
unanimous consent that this bill be printed in the Record.
There being no objection, the text of bill was ordered to be printed
in the Record, as follows:
S. 1443
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
[[Page S2358]]
(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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