On August 17, 2018, the federal Internal Revenue Service released a private ruling letter (Number 201833012) concluding that an employer may amend its 401(k) plan to provide student loan repayments (SLR) nonelective contributions under the program without violating the “contingent benefit” prohibitions of 26 U.S.C. § 401(k)(4)(A) and § 1.401(k)-1(e)(6).
The ruling assumes that the employer will not extend any student loans to employees eligible for the program and details how SLR payments may be linked to the employer’s 401(k) plan.
