Retirement Plans; Cash or Deferred Arrangements Under Section 401(k) and Guidance Under Section 110 of the SECURE 2.0 Act

SECURE 2.0 Student Loan Match Compliance

Employers preparing to offer 401(k) matches based on employee student loan repayments will face increased administrative burdens, according to a recent IRS announcement. The agency is updating its information collection procedures to monitor compliance with Section 110 of the SECURE 2.0 Act of 2022. This section allows employers to treat "qualified student loan payments" (QSLPs) as elective deferrals for the purpose of making matching contributions to employees' retirement plans. A QSLP is defined as any indebtedness incurred by the employee solely to pay for qualified higher education expenses of the employee, their spouse, or a dependent.

The IRS estimates that the new statute will increase paperwork burden by 96,875 hours. This increase is linked to Notice 2024–63, which provides guidance on how payments on qualified education loans can be considered QSLPs, enabling employers to make matching contributions. Plan sponsors will use the collected information to process claims for QSLP matches.

The specific changes affect two key areas:

• TD 9169: This regulation project number relates to requirements under Internal Revenue Code (IRC) Sections 401(k)(12)(D) and 401(m)(11)(A)(ii). Section 401(k)(12)(D) concerns the notice requirements for safe harbor 401(k) plans, mandating that eligible employees receive written notice of their rights and obligations. Section 401(m)(11)(A)(ii) provides parallel notice requirements for safe harbor matching contributions. The IRS is increasing the number of respondents to 87,500, increasing the burden hours by 124,250 due to an agency estimate.

• Notice 2024–63: This notice provides guidance on implementing the QSLP matching provisions introduced by the SECURE 2.0 Act. It increases the number of employees eligible for matching contributions by including those making QSLPs.

Quarterly Expatriate List Released

Transitioning from qualified student loan payment matching, the IRS has also released its routine quarterly publication of individuals who have chosen to expatriate. This list, covering the quarter ending December 31, 2025, is mandated by IRC section 6039G, part of the Health Insurance Portability and Accountability Act (HIPAA) of 1996, as amended. Section 6039G requires the Secretary of the Treasury to publish the name of each individual losing United States citizenship (within the meaning of section 877(a) or 877A) with respect to whom the Secretary received information during the quarter. The list also includes long-term residents, as defined in section 877(e)(2), who are treated as if they were citizens of the United States who lost citizenship. While the publication does not detail the reasons for expatriation, it serves as a routine disclosure of individuals who have relinquished their U.S. citizenship or long-term residency, and this quarter's list is quite extensive, containing thousands of entries.