PLANSPONSOR - June/July 2020 - 38
WELLNESS STRATEGIES
Debt Busters
How employers can help their workers repay their college loans
A
provision of the Coronavirus Aid,
Relief and Economic Security
(CARES) Act makes it possible
for an employer to contribute up to $5,250
toward a worker's student debt repayment,
this year. The money is not subject
to payroll tax for the employer or income
tax for the employee.
Until now, employers have lacked
such an option, but the coronavirus relief
legislation allows for it via a temporary
change to the Internal Revenue Code
(IRC). " Section 127 of the code provides an
opportunity for employers to give educational
assistance to their employees, and
previously that's been limited to tuition
reimbursement for employees currently
working on a degree, " says Anthony
Antognoli, a partner in law firm Hinshaw
& Culbertson LLP in Chicago. " Up to now,
38 PLANSPONSOR.COM June - July 2020
the employer could not say, 'You went to
college or graduate school already, and
we'll help you pay back your loans, tax
free.' The CARES Act made that parity
available under Section 127, [and] greatly
expands what Section 127 programs can
do this year. "
" The big negative for employers is
that [the provision] sunsets at the end of
2020, " says Jeff Holdvogt, a partner in law
firm McDermott Will & Emery, also in
Chicago. " It could be extended, or made
permanent: It's not unusual for new code
provisions to start out as temporary and
ultimately become permanent. " Even if
it lasts only through December, he says,
some employers are considering implementing
it anyway as a boost to employee
morale during a challenging year.
Adding a program successfully
Art by Mark Wang
requires that employers take a few key
steps, Holdvogt says. " No. 1, they need
to make sure they are complying with
the requirements of Section 127 of the
code. " For example, the program's design
may not discriminate against non-highly
compensated employees (non-HCEs)-
i.e., by being designed to help only
highly compensated employees or owners.
" No. 2, if employers already have an
existing tuition reimbursement program,
they need to understand that the $5,250
contribution limit is a combined limit. So
if someone is getting $3,000 this year for
tuition reimbursement, that employee
can get only $2,250 for repayment of
student loans. "
No. 3, employers should consider
selecting a third-party vendor that specializes
in student loan programs rather than
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PLANSPONSOR - June/July 2020
Table of Contents for the Digital Edition of PLANSPONSOR - June/July 2020
Revisiting Wellness
2020 Recordkeeping Survey
Blight Resistant
Debt Busters
A Time for Caution
PLANSPONSOR - June/July 2020 - Cover1
PLANSPONSOR - June/July 2020 - Cover2
PLANSPONSOR - June/July 2020 - 1
PLANSPONSOR - June/July 2020 - 2
PLANSPONSOR - June/July 2020 - 3
PLANSPONSOR - June/July 2020 - 4
PLANSPONSOR - June/July 2020 - 5
PLANSPONSOR - June/July 2020 - 6
PLANSPONSOR - June/July 2020 - 7
PLANSPONSOR - June/July 2020 - 8
PLANSPONSOR - June/July 2020 - 9
PLANSPONSOR - June/July 2020 - 10
PLANSPONSOR - June/July 2020 - 11
PLANSPONSOR - June/July 2020 - 12
PLANSPONSOR - June/July 2020 - 13
PLANSPONSOR - June/July 2020 - Revisiting Wellness
PLANSPONSOR - June/July 2020 - 15
PLANSPONSOR - June/July 2020 - 16
PLANSPONSOR - June/July 2020 - 17
PLANSPONSOR - June/July 2020 - 2020 Recordkeeping Survey
PLANSPONSOR - June/July 2020 - 19
PLANSPONSOR - June/July 2020 - 20
PLANSPONSOR - June/July 2020 - 21
PLANSPONSOR - June/July 2020 - 22
PLANSPONSOR - June/July 2020 - 23
PLANSPONSOR - June/July 2020 - 24
PLANSPONSOR - June/July 2020 - 25
PLANSPONSOR - June/July 2020 - 26
PLANSPONSOR - June/July 2020 - 27
PLANSPONSOR - June/July 2020 - 28
PLANSPONSOR - June/July 2020 - 29
PLANSPONSOR - June/July 2020 - 30
PLANSPONSOR - June/July 2020 - 31
PLANSPONSOR - June/July 2020 - 32
PLANSPONSOR - June/July 2020 - 33
PLANSPONSOR - June/July 2020 - 34
PLANSPONSOR - June/July 2020 - 35
PLANSPONSOR - June/July 2020 - Blight Resistant
PLANSPONSOR - June/July 2020 - 37
PLANSPONSOR - June/July 2020 - Debt Busters
PLANSPONSOR - June/July 2020 - 39
PLANSPONSOR - June/July 2020 - A Time for Caution
PLANSPONSOR - June/July 2020 - 41
PLANSPONSOR - June/July 2020 - 42
PLANSPONSOR - June/July 2020 - 43
PLANSPONSOR - June/July 2020 - 44
PLANSPONSOR - June/July 2020 - 45
PLANSPONSOR - June/July 2020 - 46
PLANSPONSOR - June/July 2020 - 47
PLANSPONSOR - June/July 2020 - 48
PLANSPONSOR - June/July 2020 - Cover3
PLANSPONSOR - June/July 2020 - Cover4
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