Secure 2.0: Matching on Student Loan Payments


The most common retirement program for mid to large-sized employers is an employee contribution arrangement, like a 401(k) plan, with an employer matching contribution. The idea is to have retirement savings be a joint effort between the employer and employee. However, many younger workers are unable to contribute to a retirement plan or are severely limited in the amount they can contribute, because of their student loan payment obligations.

To attract and retain young talent, a few forward-thinking companies created retirement plans where employees’ student loan payments were treated like deferrals in calculating the employer matching contribution. Therefore, even if an employee can’t afford to contribute to the plan, they can get an employer contribution based on their student loan payments. The problem was that no statutory basis existed for such plans, so they each had to submit to the IRS for approval.

Congress took note of this idea and formalized the concept of student loan payment matching with the SECURE 2.0 legislation passed in 2022.

Treating Student Loan Payments as Deferrals

Effective for plan years beginning after December 31, 2023, all 401(k), 403(b), 457(b), and SIMPLE IRA plans will have the option to treat student loan payments as deferrals for the purpose of calculating the plan’s matching contributions.

The loan must be a “qualified education loan” as described in IRC 221(d)(1) that is incurred on behalf of the employee, employee’s spouse, or dependent.

Since the employer doesn’t have access to student loan information, the employee is required to furnish the employer with an annual certification of the amount of student loan payments made during the prior year. This will necessitate special administrative procedures, especially for plans that calculate matching contributions on a payroll-period basis.

When performing compliance testing, a plan may separately test the participants who are receiving matches on student loans from the regular plan participants. This means the plan administrator can test the payroll deferral and matching contributions at year-end without having to wait to receive data about the student loan payments.

As an Employer or HR Representative, What Should You Do?

If your company has a 401(k), 403(b), 457(b), or SIMPLE IRA, make sure you are aware of student loan matching becoming available for the 2024 plan year. Remember: this is an optional provision. You do not have to allow it under the plan. However, it is a great way to attract younger talent to your company, so management should take it into consideration.

As an Employee, What Should You Do?

Be on the lookout for information from your employer regarding changes in the retirement plan for 2024 because your employer may be adopting student loan matching provisions. If so, make sure you are prepared to self-certify your payments at year-end. Don’t miss out on matching contributions!

Please contact Jason Hamilton, Director of Retirement, if you have questions or would like to learn more at

MAI Retirement is a division of MAI Capital Management, LLC (“MAI”). 

MAI is an investment adviser registered with the Securities and Exchange Commission.

MAI does not provide legal or tax advice to retirement plans.  Please consult your legal or tax advisor before making any legal or tax decisions. 

We look forward to learning about your financial goals.