Title: Retirement Parity for Student Loans Act
Policy area: Taxation

Summary:
Retirement Parity for Student Loans Act
This bill allows certain employer-sponsored retirement plans to make matching contributions for an employee's student loan payments as if the loan payments were salary reduction contributions to the retirement plan.

[Congressional Bills 115th Congress]
[From the U.S. Government Publishing Office]
[S. 3771 Introduced in Senate (IS)]

<DOC>






115th CONGRESS
  2d Session
                                S. 3771

   To amend the Internal Revenue Code of 1986 to permit treatment of 
 student loan payments as elective deferrals for purposes of employer 
            matching contributions, and for other purposes.


_______________________________________________________________________


                   IN THE SENATE OF THE UNITED STATES

                           December 18, 2018

 Mr. Wyden (for himself and Mr. Cardin) introduced the following bill; 
     which was read twice and referred to the Committee on Finance

_______________________________________________________________________

                                 A BILL


 
   To amend the Internal Revenue Code of 1986 to permit treatment of 
 student loan payments as elective deferrals for purposes of employer 
            matching contributions, and for other purposes.

    Be it enacted by the Senate and House of Representatives of the 
United States of America in Congress assembled,

SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Retirement Parity for Student Loans 
Act''.

SEC. 2. TREATMENT OF STUDENT LOAN PAYMENTS AS ELECTIVE DEFERRALS FOR 
              PURPOSES OF MATCHING CONTRIBUTIONS.

    (a) In General.--Subparagraph (A) of section 401(m)(4) of the 
Internal Revenue Code of 1986 is amended by striking ``and'' at the end 
of clause (i), by striking the period at the end of clause (ii) and 
inserting ``, and'', and by adding at the end the following new clause:
                            ``(iii) subject to the requirements of 
                        paragraph (13), any employer contribution made 
                        to a defined contribution plan on behalf of an 
                        employee on account of a qualified student loan 
                        payment.''.
    (b) Qualified Student Loan Payment.--Paragraph (4) of section 
401(m) of the Internal Revenue Code of 1986 is amended by adding at the 
end the following new subparagraph:
                    ``(D) Qualified student loan payment.--The term 
                `qualified student loan payment' means a payment made 
                by an employee in repayment of a qualified education 
                loan (as defined in section 221(d)(1)) incurred to pay 
                qualified higher education expenses of the employee, 
                but only--
                            ``(i) to the extent such payments in the 
                        aggregate for the year do not exceed an amount 
                        equal to--
                                    ``(I) the limitation applicable 
                                under section 402(g) for the year (or, 
                                if lesser, the employee's compensation 
                                (as defined in section 415(c)(3)) for 
                                the year), reduced by
                                    ``(II) the elective deferrals made 
                                by the employee for such year, and
                            ``(ii) if the employee provides evidence of 
                        such loan and such payments to the employer 
                        making the matching contribution under this 
                        paragraph.
                For purposes of this subparagraph, the term `qualified 
                higher education expenses' means the cost of attendance 
                (as defined in section 472 of the Higher Education Act 
                of 1965, as in effect on the day before the date of the 
                enactment of the Taxpayer Relief Act of 1997) at an 
                eligible educational institution (as defined in section 
                221(d)(2)).''.
    (c) Matching Contributions for Qualified Student Loan Payments.--
Subsection (m) of section 401 of the Internal Revenue Code of 1986 is 
amended by redesignating paragraph (13) as paragraph (14), and by 
inserting after paragraph (12) the following new paragraph:
            ``(13) Matching contributions for qualified student loan 
        payments.--
                    ``(A) In general.--For purposes of paragraph 
                (4)(A)(iii), an employer contribution made to a defined 
                contribution plan on account of a qualified student 
                loan payment shall be treated as a matching 
                contribution for purposes of this title if--
                            ``(i) the plan provides matching 
                        contributions on account of elective deferrals 
                        at the same rate as contributions on account of 
                        qualified student loan payments,
                            ``(ii) the plan provides matching 
                        contributions on account of qualified student 
                        loan payments only on behalf of employees 
                        otherwise eligible to make elective deferrals, 
                        and
                            ``(iii) under the plan, all employees 
                        eligible to receive matching contributions on 
                        account of elective deferrals are eligible to 
                        receive matching contributions on account of 
                        qualified student loan payments.
                    ``(B) Treatment for purposes of nondiscrimination 
                rules, etc.--
                            ``(i) Nondiscrimination rules.--For 
                        purposes of subparagraph (A)(iii), subsection 
                        (a)(4), and section 410(b), matching 
                        contributions described in paragraph 
                        (4)(A)(iii) shall not fail to be treated as 
                        available to an employee solely because such 
                        employee does not have debt incurred under a 
                        qualified education loan (as defined in section 
                        221(d)(1)).
                            ``(ii) Student loan payments not treated as 
                        plan contribution.--Except as provided in 
                        clause (iii), a qualified student loan payment 
                        shall not be treated as a contribution to a 
                        plan under this title.
                            ``(iii) Matching contribution rules.--
                        Solely for purposes of meeting the requirements 
                        of paragraph (11)(B) or (12) of this 
                        subsection, or paragraph (11)(B)(i)(II), 
                        (12)(B), or (13)(D) of subsection (k), a plan 
                        may treat a qualified student loan payment as 
                        an elective deferral or an elective 
                        contribution, whichever is applicable.
                    ``(C) Regulatory authority.--The Secretary shall 
                prescribe regulations--
                            ``(i) setting forth the conditions under 
                        which a plan administrator may rely upon 
                        evidence submitted by an employee of qualified 
                        student loan payments, and
                            ``(ii) permitting a plan to make matching 
                        contributions for qualified student loan 
                        repayments at a different frequency than 
                        matching contributions are otherwise made under 
                        the plan, provided that the frequency is not 
                        less than annually.''.
    (d) Simple Retirement Accounts.--Paragraph (2) of section 408(p) of 
the Internal Revenue Code of 1986 is amended by adding at the end the 
following new subparagraph:
                    ``(F) Matching contributions for qualified student 
                loan payments.--
                            ``(i) In general.--Subject to the rules of 
                        clause (iii), an arrangement shall not fail to 
                        be treated as meeting the requirements of 
                        subparagraph (A)(iii) solely because under the 
                        arrangement, solely for purposes of such 
                        subparagraph, qualified student loan payments 
                        are treated as amounts elected by the employee 
                        under subparagraph (A)(i)(I) to the extent such 
                        payments do not exceed--
                                    ``(I) the applicable dollar amount 
                                under subparagraph (E) (after 
                                application of section 414(v)) for the 
                                year (or, if lesser, the employee's 
                                compensation (as defined in section 
                                415(c)(3)) for the year), reduced by
                                    ``(II) any other amounts elected by 
                                the employee under subparagraph 
                                (A)(i)(I) for the year.
                            ``(ii) Qualified student loan payment.--For 
                        purposes of this subparagraph--
                                    ``(I) In general.--The term 
                                `qualified student loan payment' means 
                                a payment made by an employee in 
                                repayment of a qualified education loan 
                                (as defined in section 221(d)(1)) 
                                incurred to pay qualified higher 
                                education expenses of the employee, but 
                                only if the employee provides evidence 
                                of such loan and such payments to the 
                                employer making the matching 
                                contribution.
                                    ``(II) Qualified higher education 
                                expenses.--The term `qualified higher 
                                education expenses' has the same 
                                meaning as when used in section 
                                401(m)(4)(D).
                            ``(iii) Applicable rules.--Clause (i) shall 
                        apply to an arrangement only if, under the 
                        arrangement--
                                    ``(I) matching contributions on 
                                account of qualified student loan 
                                payments are provided only on behalf of 
                                employees otherwise eligible to elect 
                                contributions under subparagraph 
                                (A)(i)(I), and
                                    ``(II) all employees otherwise 
                                eligible to participate in the 
                                arrangement are eligible to receive 
                                matching contributions on account of 
                                qualified student loan payments.''.
    (e) 403(b) Plans.--Subparagraph (A) of section 403(b)(12) of the 
Internal Revenue Code of 1986 is amended by adding at the end the 
following: ``The fact that the employer offers matching contributions 
on account of qualified student loan payments as described in section 
401(m)(13) shall not be taken into account in determining whether the 
arrangement satisfies the requirements of clause (ii) (and any 
regulation thereunder).''.
    (f) Effective Date.--The amendments made by this section shall 
apply to contributions made for years beginning after December 31, 
2019.
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