[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.
                                 ______