Los Angeles partner Fred Reish authored an article in Investment News titled “The Ins and Outs of Pairing a 401(k) Plan Match with Student Loan Repayment.”
Fred notes that many employees are struggling with financial issues created by large debts to finance their college education. One side effect of this trend is that many of these newly minted graduates and early-stage employees are not deferring into their employers’ 401(k) plans.
The article discusses the way that one large employer is trying to remedy this problem. The company proposed a design for its 401(k) plan to match for student loan payments. The company then filed a request with the Internal Revenue Service (IRS) to approve that design, and the IRS recently granted its approval in a private letter ruling. Fred explains the benefits of such an arrangement, as well as issues companies should be aware of as they consider similar structures for their own plans.