I 116TH CONGRESS 2D SESSION H. R. 6276 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 HOUSE OF REPRESENTATIVES MARCH 13, 2020 Mr. DANNY K. DAVIS of Illinois (for himself, Mr. LAHOOD, Ms. SEWELL of Alabama, Mr. PASCRELL, Mrs. TRAHAN, Mr. ZELDIN, Mr. ESTES, and Mr. BRENDAN F. BOYLE of Pennsylvania) introduced the following bill; which was referred to the Committee on Ways and Means 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 Representa- 1 tives of the United States of America in Congress assembled, 2 SECTION 1. SHORT TITLE. 3 This Act may be cited as the ‘‘Retirement Parity for 4 Student Loans Act’’. 5 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00001 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 2 •HR 6276 IH SEC. 2. TREATMENT OF STUDENT LOAN PAYMENTS AS 1 ELECTIVE DEFERRALS FOR PURPOSES OF 2 MATCHING CONTRIBUTIONS. 3 (a) IN GENERAL.—Subparagraph (A) of section 4 401(m)(4) of the Internal Revenue Code of 1986 is 5 amended by striking ‘‘and’’ at the end of clause (i), by 6 striking the period at the end of clause (ii) and inserting 7 ‘‘, and’’, and by adding at the end the following new 8 clause: 9 ‘‘(iii) subject to the requirements of 10 paragraph (13), any employer contribution 11 made to a defined contribution plan on be- 12 half of an employee on account of a quali- 13 fied student loan payment.’’. 14 (b) QUALIFIED STUDENT LOAN PAYMENT.—Para- 15 graph (4) of section 401(m) of the Internal Revenue Code 16 of 1986 is amended by adding at the end the following 17 new subparagraph: 18 ‘‘(D) QUALIFIED STUDENT LOAN PAY- 19 MENT.—The term ‘qualified student loan pay- 20 ment’ means a payment made by an employee 21 in repayment of a qualified education loan (as 22 defined in section 221(d)(1)) incurred to pay 23 qualified higher education expenses of the em- 24 ployee, but only— 25 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00002 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 3 •HR 6276 IH ‘‘(i) to the extent such payments in 1 the aggregate for the year do not exceed 2 an amount equal to— 3 ‘‘(I) the limitation applicable 4 under section 402(g) for the year (or, 5 if lesser, the employee’s compensation 6 (as defined in section 415(c)(3)) for 7 the year), reduced by 8 ‘‘(II) the elective deferrals made 9 by the employee for such year, and 10 ‘‘(ii) if the employee certifies to the 11 employer making the matching contribu- 12 tion under this paragraph that such pay- 13 ment has been made on such loan. 14 For purposes of this subparagraph, the term 15 ‘qualified higher education expenses’ means the 16 cost of attendance (as defined in section 472 of 17 the Higher Education Act of 1965, as in effect 18 on the day before the date of the enactment of 19 the Taxpayer Relief Act of 1997) at an eligible 20 educational institution (as defined in section 21 221(d)(2)).’’. 22 (c) MATCHING CONTRIBUTIONS FOR QUALIFIED 23 STUDENT LOAN PAYMENTS.—Subsection (m) of section 24 401 of the Internal Revenue Code of 1986 is amended by 25 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00003 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 4 •HR 6276 IH redesignating paragraph (13) as paragraph (14), and by 1 inserting after paragraph (12) the following new para- 2 graph: 3 ‘‘(13) MATCHING CONTRIBUTIONS FOR QUALI- 4 FIED STUDENT LOAN PAYMENTS.— 5 ‘‘(A) IN GENERAL.—For purposes of para- 6 graph (4)(A)(iii), an employer contribution 7 made to a defined contribution plan on account 8 of a qualified student loan payment shall be 9 treated as a matching contribution for purposes 10 of this title if— 11 ‘‘(i) the plan provides matching con- 12 tributions on account of elective deferrals 13 at the same rate as contributions on ac- 14 count of qualified student loan payments, 15 ‘‘(ii) the plan provides matching con- 16 tributions on account of qualified student 17 loan payments only on behalf of employees 18 otherwise eligible to make elective defer- 19 rals, and 20 ‘‘(iii) under the plan, all employees el- 21 igible to receive matching contributions on 22 account of elective deferrals are eligible to 23 receive matching contributions on account 24 of qualified student loan payments. 25 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00004 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 5 •HR 6276 IH ‘‘(B) TREATMENT FOR PURPOSES OF NON- 1 DISCRIMINATION RULES, ETC.— 2 ‘‘(i) NONDISCRIMINATION RULES.— 3 For purposes of subparagraph (A)(iii), 4 subsection (a)(4), and section 410(b), 5 matching contributions described in para- 6 graph (4)(A)(iii) shall not fail to be treated 7 as available to an employee solely because 8 such employee does not have debt incurred 9 under a qualified education loan (as de- 10 fined in section 221(d)(1)). 11 ‘‘(ii) STUDENT LOAN PAYMENTS NOT 12 TREATED AS PLAN CONTRIBUTION.—Ex- 13 cept as provided in clause (iii), a qualified 14 student loan payment shall not be treated 15 as a contribution to a plan under this title. 16 ‘‘(iii) MATCHING CONTRIBUTION 17 RULES.—Solely for purposes of meeting 18 the requirements of paragraph (11)(B) or 19 (12) of this subsection, or paragraph 20 (11)(B)(i)(II), (12)(B), or (13)(D) of sub- 21 section (k), a plan may treat a qualified 22 student loan payment as an elective defer- 23 ral or an elective contribution, whichever is 24 applicable.’’. 25 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00005 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 6 •HR 6276 IH (d) SIMPLE RETIREMENT ACCOUNTS.—Paragraph 1 (2) of section 408(p) of the Internal Revenue Code of 2 1986 is amended by adding at the end the following new 3 subparagraph: 4 ‘‘(F) MATCHING CONTRIBUTIONS FOR 5 QUALIFIED STUDENT LOAN PAYMENTS.— 6 ‘‘(i) IN GENERAL.—Subject to the 7 rules of clause (iii), an arrangement shall 8 not fail to be treated as meeting the re- 9 quirements of subparagraph (A)(iii) solely 10 because under the arrangement, solely for 11 purposes of such subparagraph, qualified 12 student loan payments are treated as 13 amounts elected by the employee under 14 subparagraph (A)(i)(I) to the extent such 15 payments do not exceed— 16 ‘‘(I) the applicable dollar amount 17 under subparagraph (E) (after appli- 18 cation of section 414(v)) for the year 19 (or, if lesser, the employee’s com- 20 pensation (as defined in section 21 415(c)(3)) for the year), reduced by 22 ‘‘(II) any other amounts elected 23 by the employee under subparagraph 24 (A)(i)(I) for the year. 25 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00006 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 7 •HR 6276 IH ‘‘(ii) QUALIFIED STUDENT LOAN PAY- 1 MENT.—For purposes of this subpara- 2 graph— 3 ‘‘(I) IN GENERAL.—The term 4 ‘qualified student loan payment’ 5 means a payment made by an em- 6 ployee in repayment of a qualified 7 education loan (as defined in section 8 221(d)(1)) incurred to pay qualified 9 higher education expenses of the em- 10 ployee, but only if the employee cer- 11 tifies to the employer making the 12 matching contribution that such pay- 13 ment has been made on such a loan. 14 ‘‘(II) QUALIFIED HIGHER EDU- 15 CATION EXPENSES.—The term ‘quali- 16 fied higher education expenses’ has 17 the same meaning as when used in 18 section 401(m)(4)(D). 19 ‘‘(iii) APPLICABLE RULES.—Clause (i) 20 shall apply to an arrangement only if, 21 under the arrangement— 22 ‘‘(I) matching contributions on 23 account of qualified student loan pay- 24 ments are provided only on behalf of 25 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00007 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 8 •HR 6276 IH employees otherwise eligible to elect 1 contributions under subparagraph 2 (A)(i)(I), and 3 ‘‘(II) all employees otherwise eli- 4 gible to participate in the arrange- 5 ment are eligible to receive matching 6 contributions on account of qualified 7 student loan payments.’’. 8 (e) 403(b) PLANS.—Subparagraph (A) of section 9 403(b)(12) of the Internal Revenue Code of 1986 is 10 amended by adding at the end the following: ‘‘The fact 11 that the employer offers matching contributions on ac- 12 count of qualified student loan payments as described in 13 section 401(m)(13) shall not be taken into account in de- 14 termining whether the arrangement satisfies the require- 15 ments of clause (ii) (and any regulation thereunder).’’. 16 (f) 457(b) PLANS.—Subsection (b) of section 457 of 17 the Internal Revenue Code of 1986 is amended by adding 18 at the end the following: ‘‘A plan which is established and 19 maintained by an employer which is described in sub- 20 section (e)(1)(A) shall not be treated as failing to meet 21 the requirements of this subsection solely because the 22 plan, or another plan maintained by the employer which 23 meets the requirements of section 401(a), provides for 24 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00008 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 9 •HR 6276 IH matching contributions on account of qualified student 1 loan payments as described in section 401(m)(13).’’. 2 (g) REGULATORY AUTHORITY.—The Secretary shall 3 prescribe regulations for purposes of implementing the 4 amendments made by this section, including regulations— 5 (1) permitting a plan to make matching con- 6 tributions for qualified student loan payments, as 7 defined in sections 401(m)(4)(D) and 408(p)(2)(F) 8 of the Internal Revenue Code of 1986, as added by 9 this section, at a different frequency than matching 10 contributions are otherwise made under the plan, 11 provided that the frequency is not less than annu- 12 ally, 13 (2) permitting employers to establish reasonable 14 procedures to claim matching contributions for such 15 qualified student loan payments under the plan, in- 16 cluding an annual deadline (not earlier than 3 17 months after the close of each plan year) by which 18 a claim must be made, and 19 (3) promulgating model amendments which 20 plans may adopt to implement matching contribu- 21 tions on such qualified student loan payments for 22 purposes of sections 401(m), 408(p), 403(b), and 23 457(b) of the Internal Revenue Code of 1986. 24 VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00009 Fmt 6652 Sfmt 6201 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS 10 •HR 6276 IH (h) EFFECTIVE DATE.—The amendments made by 1 this section shall apply to contributions made for years 2 beginning after December 31, 2019. 3 Æ VerDate Sep 11 2014 01:18 Mar 28, 2020 Jkt 099200 PO 00000 Frm 00010 Fmt 6652 Sfmt 6301 E:\BILLS\H6276.IH H6276 pamtmann on DSKBC07HB2PROD with BILLS