Workers could make student loan payments while their employers make matching contributions to their defined contribution accounts under bipartisan House legislation introduced Friday.
The proposed Retirement Parity for Student Loans Act of 2020 sponsored by Rep. Danny K. Davis, D-Ill., and Darin LaHood, R-Ill., would treat the employer contributions as if the student loan payments were salary reduction contributions.
Similar legislation was introduced in the Senate by Ron Wyden, D-Ore. and other Democrats last May.
Under current law, employers may make matching contributions to those retirement plans only if employees are also making contributions. The bill would amend the Internal Revenue Code of 1986 to permit treatment of student loan payments as elective deferrals for purposes of employer matching contributions, among other purposes.
The benefit applies only to repayments of student loan debt that was incurred by a worker for higher education expenses. A worker must certify the amount of student loan repayments that have been made during a plan year in order to receive the benefit, according to a bill summary.
