With unemployment rates so low, many employers are looking for creative ways to attract and retain top talent.  One employer came up with an innovative way to help employees with student debt through a proposed change to its 401(k) plan.  In a private letter ruling, the IRS approved a student loan benefit program where, if an employee makes student loan repayments, the plan sponsor would make an employer nonelective contribution on behalf of an employee to the plan.  This would allow an employee to pay down student debt while saving for retirement.

Because it is a private letter ruling, it is only directed to the taxpayer requesting it, is only applicable to the specific facts presented, and may not be cited as precedent.  An employer interested in helping employees with their student debt with a similar program could request a similar private letter ruling from the IRS.