|March 24, 2019 | www.fisherphillips.com|
Employer-sponsored student loan repayment programs are an effective way to attract highly educated employees with student loan debt. Traditional student loan repayment programs—in which employers give a lump sum or reimburse employees for payments toward their student loans—have grown significantly in popularity over the last decade. However, these programs are often expensive to maintain because the payments are afforded no special treatment under the Tax Code. As a result, benefits paid under the program generally constitute additional taxable income to the employee.
When I speak with employers about the onerous obligations under ERISA and the court decisions that followed, I frequently tell them that the “E” in ERISA stands for “employee,” not employer. It’s good to keep this in mind when navigating the statute’s complexities—especially because courts have frequently found ways to expand ERISA’s protections in favor of employee benefit plans. A recent federal appeals court decision highlights this reality, examining some often overlooked areas of the law. While these expansions of the law are not new, this recent opinion provides a good reminder of the current state of the law.