Start spreading the news…student loan 401(k) match revenue ruling in the works

by Ben Gibbons

As you may recall, Private Letter Ruling 201833012 (the “PLR”), concerning the IRS’ approval of Abbott Laboratories’ plan to implement 401(k) matching contributions on student loan repayments, was released to much fanfare in the summer of 2018.  We’ve learned that at last week’s annual NASPP conference in New Orleans, Stephen Tackney, Deputy Associate Chief Counsel of the IRS Office of Chief Counsel (and author of the Section 409A deferred compensation regulations) announced that the IRS is working on converting the PLR into a revenue ruling that can be relied upon by all employers.

This is significant because private letter rulings are applicable only to the employers requesting such rulings, and may not be cited by others as precedent.  In addition, the design of the matching contributions in the PLR was far from “one size fits all”, adding to the challenges of employers who desire to implement a similar program.  A conversion of the PLR into a revenue ruling indicates further approval by the IRS of the principles set forth in the PLR and their belief that all taxpayers should have the option to adopt a similar program.  Tackney also indicated that the contemplated revenue ruling would allow employers to vary their matching contribution program from the PLR to some degree, such as allowing matching contributions in connection with an employee wellness program. 

Stay tuned to the Benefits Dial for future updates on this topic when (and if) the revenue ruling is released.  In the meantime, if your company is considering implementing matching contributions on student loan repayments, Holland & Hart’s Benefits Law Group can help.