Journal Article

401(K) PLANS: Excuse Me But Your QSLP Is Showing

Murphy, Michelle

2025

Overview

[...]even with the hefty compensation you pay to a person coming out of college with a professional degree, the loan repayments are a considerable burden for college graduates. Private Letter Ruling (PLR) 201833012 was issued on May 22, 2018, and allowed that Abbott's plan design was legal and did not violate the contingent benefit rule which prohibits an employer to add additional restrictions upon the employee in order to participate in making employee deferrals. [...]Mom cosigned every loan and is equally responsible for payment as the student (even though the understanding of Mom and Child was that the student would be the one to make the payments). [...]the Internal Revenue Service (IRS) recognized that the availability of matching contributions on loan payments may act as a disincentive to such employees making deferrals. [...]a plan sponsor may elect to use one of two special ADP testing methods: (1) the ADP testing may be performed in two tests, one including all employees who receive QSLPs and one including only employees without QSLPs; or (2) one ADP test may be performed including the QSLP employee deferrals with the general

• Publisher: Aspen Publishers, Inc
• Subject: Certification / Deferred compensation / Education expenses / Employees / Employers / Retirement plans / Student loans / Wages & salaries