S. 1443Senate117th Congress (2021-2023)In Committee

Retirement Parity for Student Loans Act

Sponsored by Ron WydenSen. Ron Wyden (D-OR)
Introduced April 29, 2021

AI-Generated Summary

Updated February 8, 2026 at 2:29 AM UTC

The Retirement Parity for Student Loans Act changes the tax code so that employee payments on qualified student loans can be treated like elective deferrals for the purpose of employer matching contributions. It lets employers add matching funds to retirement plans based on those loan payments, giving workers a retirement‑style benefit while they repay student debt. The rule applies to 401(k), 403(b), 457(b) and SIMPLE retirement plans and affects employees with qualifying education loans and their employers.

Key Provisions

  • Adds a new definition of “qualified student loan payment” and allows such payments to count as elective deferrals for matching contributions in retirement plans.
  • Permits employers to make matching contributions on behalf of employees for qualified student loan payments, with the same vesting and eligibility rules as traditional matching contributions.
  • Extends the matching‑contribution treatment to 401(k), 403(b), 457(b) and SIMPLE IRA plans, and clarifies that nondiscrimination testing will not penalize plans for offering these matches.
  • Allows plans to treat qualified loan payments as elective deferrals for testing purposes and sets procedures for employee certification and employer claims.
  • Authorizes the Treasury Secretary to issue regulations on implementation, including timing of contributions and model plan amendments; effective for plan years beginning after Dec. 31, 2021.

Legislative Activity

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1 earlier action
SenateIntro Referral Latest Action

Read twice and referred to the Committee on Finance. (text: CR S2357-2358; Sponsor introductory remarks on measure: CR S2357)

April 29, 2021

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SenateIntro Referral

Introduced in Senate

April 29, 2021

SenateIntro Referral

Read twice and referred to the Committee on Finance. (text: CR S2357-2358; Sponsor introductory remarks on measure: CR S2357)

April 29, 2021

Floor Debate

8 members

What members said about S. 1443 on the floor

2 Republicans6 Democrats
John Thune
Sen. John ThuneR-SD · Apr 29, 2021

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record. Mr. President, along with my livestock producer protection bill, I am also introducing legislation today to…

Tim Kaine
Sen. Tim KaineD-VA · Apr 29, 2021

Mr. President. A vibrant and independent media and public access to accurate information are critical to the functioning of any democracy. A free press is so important that our Founding Fathers…

Susan M. Collins
Sen. Susan M. CollinsR-ME · Apr 29, 2021

Mr. President, today I am pleased to be joined by my friend and colleague from Delaware, Senator Chris Coons, to reintroduce the Reach Every Mother and Child Act of 2021. Our legislation would make…

Alex Padilla
Sen. Alex PadillaD-CA · Apr 29, 2021

Mr. President, I rise to introduce the ``Protecting Unique and Beautiful Landscapes by Investing in California (PUBLIC) Lands Act.'' This measure would increase protections for over 1 million acres…

Dianne Feinstein
Sen. Dianne FeinsteinD-CA · Apr 29, 2021

Mr. President, I rise today to reintroduce bipartisan legislation that would better align the Department of Housing and Urban Development's (HUD) homeless assistance programs with other federal…

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Jack Reed
Sen. Jack ReedD-RI · Apr 29, 2021

Today, I am joined by Senators Warren, Brown, Van Hollen, and Gillibrand to introduce legislation to ensure that at least one Federal Reserve Governor has demonstrated primary experience in…

Ron Wyden
Sen. Ron WydenD-OR · Apr 29, 2021

Madam President, today I have introduced the Retirement Parity for Student Loans Act. This legislation would permit employers to make matching contributions to workers under 401(k) and similar types…

Ron Wyden
Sen. Ron WydenD-OR · Apr 29, 2021

Madam President, today I have introduced the Retirement Parity for Student Loans Act. This legislation would permit employers to make matching contributions to workers under 401(k) and similar types…

Richard J. Durbin
Sen. Richard J. DurbinD-IL · Apr 29, 2021

Mr. President, I ask unanimous consent that the text of the bill be printed in the Record.

Bill Text

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Introduced in SenateIssued April 29, 2021

II

117th CONGRESS

1st Session

S. 1443

IN THE SENATE OF THE UNITED STATES

April 29, 2021

Mr. Wyden (for himself, Mr. Brown, Ms. Cantwell, Mr. Cardin, and Mr. Whitehouse) introduced the following bill; which was read twice and referred to the Committee on Finance

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.

1.

Short title

This Act may be cited as the Retirement Parity for Student Loans Act.

2.

Treatment of student loan payments as elective deferrals for purposes of matching contributions

(a)

In general

Subparagraph (A) of section 401(m)(4) of the Internal Revenue Code of 1986 is amended by striking and at the end of clause (i), by striking the period at the end of clause (ii) and inserting , and, and by adding at the end the following new clause:

(iii)

subject to the requirements of paragraph (13), any employer contribution made to a defined contribution plan on behalf of an employee on account of a qualified student loan payment.

.

(b)

Qualified student loan payment

Paragraph (4) of section 401(m) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(D)

Qualified student loan payment

The term qualified student loan payment means a payment made by an employee in repayment of a qualified education loan (as defined in section 221(d)(1)) incurred by the employee to pay qualified higher education expenses, but only—

(i)

to the extent such payments in the aggregate for the year do not exceed an amount equal to—

(I)

the limitation applicable under section 402(g) for the year (or, if lesser, the employee's compensation (as defined in section 415(c)(3)) for the year), reduced by

(II)

the elective deferrals made by the employee for such year, and

(ii)

if the employee certifies to the employer making the matching contribution under this paragraph that such payment has been made on such loan.

For purposes of this subparagraph, the term qualified higher education expenses means the cost of attendance (as defined in section 472 of the Higher Education Act of 1965, as in effect on the day before the date of the enactment of the Taxpayer Relief Act of 1997) at an eligible educational institution (as defined in section 221(d)(2)).

.

(c)

Matching contributions for qualified student loan payments

Subsection (m) of section 401 of the Internal Revenue Code of 1986 is amended by redesignating paragraph (13) as paragraph (14), and by inserting after paragraph (12) the following new paragraph:

(13)

Matching contributions for qualified student loan payments

(A)

In general

For purposes of paragraph (4)(A)(iii), an employer contribution made to a defined contribution plan on account of a qualified student loan payment shall be treated as a matching contribution for purposes of this title if—

(i)

the plan provides matching contributions on account of elective deferrals at the same rate as contributions on account of qualified student loan payments,

(ii)

the plan provides matching contributions on account of qualified student loan payments only on behalf of employees otherwise eligible to receive matching contributions on account of elective deferrals,

(iii)

under the plan, all employees eligible to receive matching contributions on account of elective deferrals are eligible to receive matching contributions on account of qualified student loan payments, and

(iv)

the plan provides that matching contributions on account of qualified student loan payments vest in the same manner as matching contributions on account of elective deferrals.

(B)

Treatment for purposes of nondiscrimination rules, etc

(i)

Nondiscrimination rules

For purposes of subparagraph (A)(iii), subsection (a)(4), and section 410(b), matching contributions described in paragraph (4)(A)(iii) shall not fail to be treated as available to an employee solely because such employee does not have debt incurred under a qualified education loan (as defined in section 221(d)(1)).

(ii)

Student loan payments not treated as plan contribution

Except as provided in clause (iii), a qualified student loan payment shall not be treated as a contribution to a plan under this title.

(iii)

Matching contribution rules

Solely for purposes of meeting the requirements of paragraph (11)(B) or (12) of this subsection, or paragraph (11)(B)(i)(II), (12)(B), or (13)(D) of subsection (k), a plan may treat a qualified student loan payment as an elective deferral or an elective contribution, whichever is applicable.

(iv)

Actual deferral percentage testing

In determining whether a plan meets the requirements of subsection (k)(3)(A)(ii) for a plan year, the plan may apply the requirements of such subsection separately with respect to all employees who receive matching contributions described in paragraph (4)(A)(iii) for the plan year.

(C)

Employer may rely on employee certification

The employer may rely on an employee certification of payment under paragraph (4)(D)(ii).

.

(d)

Simple retirement accounts

Paragraph (2) of section 408(p) of the Internal Revenue Code of 1986 is amended by adding at the end the following new subparagraph:

(F)

Matching contributions for qualified student loan payments

(i)

In general

Subject to the rules of clause (iii), an arrangement shall not fail to be treated as meeting the requirements of subparagraph (A)(iii) solely because under the arrangement, solely for purposes of such subparagraph, qualified student loan payments are treated as amounts elected by the employee under subparagraph (A)(i)(I) to the extent such payments do not exceed—

(I)

the applicable dollar amount under subparagraph (E) (after application of section 414(v)) for the year (or, if lesser, the employee's compensation (as defined in section 415(c)(3)) for the year), reduced by

(II)

any other amounts elected by the employee under subparagraph (A)(i)(I) for the year.

(ii)

Qualified student loan payment

For purposes of this subparagraph—

(I)

In general

The term qualified student loan payment means a payment made by an employee in repayment of a qualified education loan (as defined in section 221(d)(1)) incurred to pay qualified higher education expenses, but only if the employee certifies to the employer making the matching contribution that such payment has been made on such a loan.

(II)

Qualified higher education expenses

The term qualified higher education expenses has the same meaning as when used in section 401(m)(4)(D).

(iii)

Applicable rules

Clause (i) shall apply to an arrangement only if, under the arrangement—

(I)

matching contributions on account of qualified student loan payments are provided only on behalf of employees otherwise eligible to elect contributions under subparagraph (A)(i)(I), and

(II)

all employees otherwise eligible to participate in the arrangement are eligible to receive matching contributions on account of qualified student loan payments.

.

(e)

403(b) plans

Subparagraph (A) of section 403(b)(12) of the Internal Revenue Code of 1986 is amended by adding at the end the following: The fact that the employer offers matching contributions on account of qualified student loan payments as described in section 401(m)(13) shall not be taken into account in determining whether the arrangement satisfies the requirements of clause (ii) (and any regulation thereunder)..

(f)

457(b) plans

Subsection (b) of section 457 of the Internal Revenue Code of 1986 is amended by adding at the end the following: A plan which is established and maintained by an employer which is described in subsection (e)(1)(A) shall not be treated as failing to meet the requirements of this subsection solely because the plan, or another plan maintained by the employer which meets the requirements of section 401(a), provides for matching contributions on account of qualified student loan payments as described in section 401(m)(13)..

(g)

Regulatory authority

The Secretary of the Treasury (or such Secretary's delegate) shall prescribe regulations for purposes of implementing the amendments made by this section, including regulations—

(1)

permitting a plan to make matching contributions for qualified student loan payments, as defined in sections 401(m)(4)(D) and 408(p)(2)(F) of the Internal Revenue Code of 1986, as added by this section, at a different frequency than matching contributions are otherwise made under the plan, provided that the frequency is not less than annually;

(2)

permitting employers to establish reasonable procedures to claim matching contributions for such qualified student loan payments under the plan, including an annual deadline (not earlier than 3 months after the close of each plan year) by which a claim must be made; and

(3)

promulgating model amendments which plans may adopt to implement matching contributions on such qualified student loan payments for purposes of sections 401(m), 408(p), 403(b), and 457(b) of the Internal Revenue Code of 1986.

(h)

Effective date

The amendments made by this section shall apply to contributions made for years beginning after December 31, 2021.