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What SECURE 2.0 Section 110 Does

SECURE 2.0 Act Section 110, effective for plan years beginning after December 31, 2023, allows employers to treat "qualified student loan payments" (QSLPs) as elective deferrals for purposes of matching contributions to a 401(k), 403(b), or SIMPLE IRA.

In plain terms: an employee who is making student loan payments instead of 401(k) contributions can now receive the employer match. Before Section 110, these employees were effectively penalized — they were paying down debt responsibly but forfeiting free money from their employer's retirement plan because they could not afford to contribute to both.

How It Works Mechanically

Example Scenario

Employee earns: $70,000/year

Employer offers: 4% 401(k) match

Employee pays: $500/month toward student loans (instead of 401(k) contributions)

Under Section 110: The employer certifies $500/month as QSLPs

Result: Employer makes a matching contribution of $233/month (4% of $70K / 12) to the employee's 401(k)

Employee outcome: Reduces student debt AND builds retirement savings simultaneously

The Section 127 + Section 110 Stack

This is where the benefit becomes truly powerful. Section 127 and Section 110 are separate provisions that work together:

ProvisionWhat It DoesMonthly Value (Example)
Section 127Employer contributes directly to employee's loan servicer, tax-free$437.50/month
Section 110Employee's own student loan payments trigger employer 401(k) match$233/month (4% match on $70K salary)
CombinedDirect debt reduction + retirement savings$670+/month in total employer-funded benefit
No competitor currently explains this stack clearly. The combined Section 127 + Section 110 benefit can be worth $8,000+ per year per employee in total employer-funded value. This is a powerful differentiator for recruiting and retention.

Implementation Requirements

To implement Section 110 matching, employers need:

  • 401(k) plan amendment to add the QSLP matching provision
  • Employee self-certification process for student loan payments
  • Annual certification deadline — must be done at least once per plan year
  • Nondiscrimination testing — QSLPs are treated as deferrals for testing purposes
  • Coordination with Section 127 if both benefits are offered

The Employer ROI Case

Section 110 is a zero-marginal-cost benefit for employers who already offer 401(k) matching. You are not adding a new expense — you are extending the match to employees who were previously excluded because their cash flow went to student loans instead of 401(k) contributions.

This disproportionately helps younger, highly educated employees — exactly the retention-critical population that is most likely to leave for a better offer. For the foundational Section 127 framework, see our Section 127 Guide. For the broader benefits landscape, see Healthcare Employee Benefits That Matter in 2026.

Frequently Asked Questions

Can an employee receive both Section 127 contributions and a Section 110 401(k) match?
Yes. These are separate provisions. The employer can contribute up to $5,250/year tax-free directly to the employee's student loans under Section 127, and the employee's own student loan payments can separately trigger the employer 401(k) match under Section 110.
Does the employee need to prove they are making student loan payments?
Yes. Employees must self-certify their qualified student loan payments at least once per plan year. The employer may rely on this certification in good faith.
Is Section 110 mandatory?
No. Section 110 is an optional provision. Employers must amend their 401(k) plan to include QSLP matching. It does not happen automatically.
What if our 401(k) provider does not support Section 110 yet?
Adoption varies by plan provider and recordkeeper. Check with your 401(k) administrator. BenefitPlus can help coordinate the Section 127 side while your retirement plan provider implements Section 110.