2024 is a big year for the SECURE 2.0 Act, with many new regulations coming into effect, some touching on hot button issues that are important across the generational divide.  Signed into law on December 23, 2022, this second-generation retirement legislation provided a multi-year phase-in of some of the most comprehensive changes to the ERISA landscape since its enactment in 1974.  With so much happening in the new year, communication and compliance are especially important to navigate the changes and successfully implement this next phase of the Act.

Student loan matching contributions

One of the most noteworthy changes is the ability for employers to voluntarily amend their retirement plan design to allow employee student loan payments to count toward employer matching contributions.  This lets employers match an employee's student loan payment within a tax-qualified retirement plan for the first time, giving credit to the payment as if it was a retirement plan contribution. In 2024, employees will be able to have their student loan payments matched, even if they aren't currently contributing to a defined contribution retirement plan.  Eligible plans include 401(k), 403(b), 457(b) and SIMPLE plans.  From a plan design perspective, it is important to note that the employer matching contributions for these student loan payments must vest under the same schedule as other traditional matching contributions.