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.
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:
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Configure the elements.
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Configure the balances.
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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.
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401 (k)
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403 (b)
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457 (b)
When defining the elements, use the Pretax Deductions primary classification and the Deferred Compensation 401k secondary classification.
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 |
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Define the employer-match elements |
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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.
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Configure balances
Configure these balances.
Balance name |
What you do |
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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.
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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.
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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.
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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.
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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.
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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).
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Start the Fast Formulas task.
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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.
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Click Edit.
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Scroll to line 32.
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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')
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Click Submit and then Compile.