Configure Employer-Match Contributions for Qualified Student Loan Payments

Section 110 under the SECURE 2.0 Act allows employees to receive matching contributions for the repayment of their student loans. The payroll process treats these student loan payments as elective deferrals for the purpose of matching contributions. Their annual contribution limits still apply.

Note: This is in addition to existing employer-match contributions. If you choose to offer matching contributions on qualified student loan payments, you must match in the same manner that you would other contributions under your plans.

Steps include:

1. Configure the elements.

2. Configure the balances.

3. Configure the employer-match Fast Formula.

Configure the elements

Use the Elements task to define separate employer-match elements for each eligible plan you offer.

• 401 (k)

• 403 (b)

• 457 (b)

When defining the elements, use the Pretax Deductions primary classification and the Deferred Compensation 401k secondary classification.

Note: In this case, you use the Deferred Compensation 401k secondary classification even for 403 (b) and 457 (b) plans.

If you're processing the student loan payments outside Oracle Cloud HCM, create an information element to track those amounts in payroll.

What you want to do	How you do it
Define the employer-match elements	Start the Elements task. Select Pretax Deductions as the primary classification and Deferred Compensation 401k as the secondary classification. Configure your element by answering all necessary template questions per your business requirements. Select No for these questions. Should the element have an associated catch-up element? Should the element have an associated Roth element? Should the element have an associated after-tax element? Select that this element has an associated employer-match element with employee contributions. Click Submit. Configure element eligibility links for the Employer Match and Employer Match Resultsindirect elements. Create links for these employer-match indirect elements only. Don't create them for the other indirect elements. Repeat these steps to create separate employer-match elements for each of your eligible plans. Use the same Deferred Compensation 401k secondary classification to configure the employer-match elements for student loan payment matching under your eligible 401 (k), 403 (b), and 457 (b) plans.
Define information elements for qualified student loan payments	If you are processing the student loan payments outside Oracle Cloud HCM, create an information element to track those amounts in payroll. Start the Elements task. Select Information as the primary classification. Complete the applicable template questions for your element, and click Submit. Update the element to add the following. Element eligibility Qualified Loan Payment Amount input value Select Primary output value as the special purpose. Set the display sequence to 1. Select Money as the unit of measure. Select Display and Allow User Entry. Click Submit.

Configure balances

Configure these balances.

Balance name	What you do
Deferred Compensation Qualified Payments	If you are using an Information element to track student loan payments processed outside Oracle Cloud HCM or have defined a deduction element, you must add those element feeds to the Deferred Compensation Qualified Payments balance. Start the Balance Definitions task. Select your US legislative data group (LDG), and search for Deferred Compensation Qualified Payments. Under Balance Feeds by Element, add your qualified student loan payment elements. Select the input value that has the payment amount. Select Add. Click Submit.
Deferred Compensation 401k Employer Match	When you defined the employer-match elements, the template automatically creates feeds to the Deferred Compensation 401k Employer Match balance. You must delete these feeds. Start the Balance Definitions task. Select your US LDG, and search for Deferred Compensation 401k Employer Match. Under Balance Feeds by Element, select the Employer Match Results element. From Actions, select Delete Balance Feed by Element. Click Continue to dismiss the warning. Click Submit.
Deferred Compensation 401k Qualified Payments Employer Match	If the employer-match element you defined applies to a 401 (k) plan, add its Employer Match Results indirect element as a balance feed to this balance. Start the Balance Definitions task. Select your US LDG, and search for Deferred Compensation 401k Qualified Payments Employer Match. Under Balance Feeds by Element, add the Employer Match Results indirect element. Select the Employer Match Calculated input value. Select Add. Click Submit.
Deferred Compensation 403b Qualified Payments Employer Match	If the employer-match element you defined applies to a 403 (b) plan, add its Employer Match Results indirect element as a balance feed to this balance. Start the Balance Definitions task. Select your US LDG, and search for Deferred Compensation 403b Qualified Payments Employer Match. Under Balance Feeds by Element, add the Employer Match Results indirect element. Select the Employer Match Calculated input value. Select Add. Click Submit.
Deferred Compensation 457 Qualified Payments Employer Match	If the employer-match element you defined applies to a 457 (b) plan, add its Employer Match Results indirect element as a balance feed to this balance. Start the Balance Definitions task. Select your US LDG, and search for Deferred Compensation 457 Qualified Payments Employer Match. Under Balance Feeds by Element, add the Employer Match Results indirect element. Select the Employer Match Calculated input value. Select Add. Click Submit.

Configure the employer-match Fast Formula

When you define an employer-match element, the template creates a fast formula for it at your LDG level. You must edit this formula to reflect the correct plan type, 401 (k), 403 (b), or 457 (b).

1. Start the Fast Formulas task.

2. Search for the employer-match formula associated with the pretax deductions element you created.

   It's named ER_MATCH_CALCULATOR_FORMULA, prefixed with the name of your element.

3. Click Edit.

4. Scroll to line 32.

5. Insert one these commands into line 32, based on the type of plan.

   Plan type	Command
   401 (k)	SET_INPUT ('student_loan', '401k')
   403 (b)	SET_INPUT ('student_loan', '403b')
   457 (b)	SET_INPUT ('student_loan', '457')

6. Click Submit and then Compile.