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Under Section 110 of SECURE Act 2.0, effective after December 31, 2023, employers can now consider qualified student loan payments as elective deferrals for employer-matching contributions to defined contribution plans.
For instance, if an employee allocates $400 monthly to a qualified education loan, the employer can treat it as if the employee deferred $400, qualifying for an employer match. Limits apply, such as the annual elective deferral limit and total annual additions to defined contribution plans.
The PeopleJoy platform simplifies Secure Act 2.0 assistance by managing the certification and calculation process for employee student loan payments. Employees annually certify these payments, a crucial step for employers to calculate matching portions manually, especially as not all 401k record keepers accommodate Secure Act 2.0.
PeopleJoy ensures compliance by tracking and verifying whether the employee, spouse, or dependent incurred the loan. By streamlining these processes, PeopleJoy aids employers in seamlessly navigating the intricacies of Secure Act 2.0, offering clarity and efficiency in managing employer matches and maintaining compliance.
Your company sets reimbursement criteria, so only certain educational items purchased or courses taken may be eligible for reimbursement. This means HR needs to scour every line item on every receipt for whether an item is eligible, then break out pen, paper and a calculator to flag any discrepancies.
No problem if you have a company with 5 employees, huge problem if you have a company with 50,000.
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