Private Letter Ruling Allowing Nonelective Contributions conditioned on Student Loan Repayments

Document Excerpt
In the present case, SLR nonelective contributions under the program are conditioned on whether an employee makes a student loan repayment during a pay period and are not conditioned (directly or indirectly) on the employee making elective contributions under a cash or deferred arrangement. Furthermore, because an employee who makes student loan repayments and thereby receives SLR nonelective contributions is still permitted to make elective contributions, the SLR nonelective contribution is not conditioned (directly or indirectly) on the employee electing to have the employer make or not make contributions under the arrangement in lieu of receiving cash. Therefore, with respect to your ruling request, we conclude that your proposal to amend the Plan to provide SLR nonelective contributions under the program will not violate the “contingent benefit” prohibition of section 401(k)(4)(A) and section 1.401(k)-1(e)(6).

Link

https://www.irs.gov/pub/irs-wd/201833012.pdf

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