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Educational assistance

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DOL Requires Electronic Filing for Top Hat, Apprenticeship, and Training Benefits
"Failure to submit the top hat plan statement does not result in penalties but does subject the plan to expanded reporting and disclosure requirements. Similarly, welfare benefit plans that provide only apprenticeship or training benefits, or both, are exempt from reporting and disclosure if a notice is [submitted] to the DOL and the plan administrator discloses certain information to employees participating, or eligible to enroll, in the plan.... Effective August 16, 2019, the final regulations require electronic submission of these notices and statements through DOL's website." (Buck)
[Official Guidance] Text of DOL Final Regs: Electronic Filing of Notices for Apprenticeship and Training Plans and Statements for 'Top Hat' Plans
13 pages. "This document contains final regulations that revise the procedures for filing apprenticeship and training plan notices and 'top hat' plan statements with the Secretary of Labor. The final regulations require electronic submission of these notices and statements, as opposed to paper filings. The final regulations will make filing these notices and statements easier and lower regulatory burdens on these plans. The final regulations also will enable the [DOL] to make reported data more readily available to participants and beneficiaries and other interested members of the public than in the past." (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
Younger Workers Put Student Loan Aid Near Top of Desired Benefits
"Health insurance, paid time off and student loan repayment aid -- in that order -- were the top three benefits identified by recent college graduates and those approaching graduation when asked what benefits they most value from an employer.... [R]espondents with college debt most wanted any new benefit dollars from their employer to go toward helping them repay their loans." (Society for Human Resource Management [SHRM]; membership may be required to view article)
Companies Lure Young Workers by Helping with Student Loan Repayments
"When it comes to luring top Millennial talent, companies have a new pitch: offering to pay down a portion of employees' student debt. With student loans outstanding reaching $1.5 trillion this year, employers realize it's a perk that can attract some of the best educated recruits. Among those who have student debt, the average owed was $32,731 ... That's enough that many younger households aren't ... doing things they want, like having kids, buying homes or saving for retirement." (Forbes)
[Opinion] Time to Pass Tax Relief for Student Loan Repayment Benefits
"In February, members of Congress reintroduced legislation that would let employers give tax-free student loan assistance up to $5,250 a year per employee. That's the same amount that Section 127 of the tax code now treats as tax-exempt for employer-provided tuition assistance." (Society for Human Resource Management [SHRM]; membership may be required to view article)
Student Loan Debt Is Weighing Heavily on Employees -- and Employers
"[T]he most common way that employers engaging with employees on student loan debt say they are offering financial wellness solutions is via pilot programs (38 percent). And the most common challenge such employers face is complexity of the programs (48 percent) and challenges in making the business case to upper management (45 percent)." (Paul Fronstin, EBRI [Employee Benefits Research Institute])
How Employers Are Tackling Student Loan Debt
16 pages. "Nearly a third (32.4 percent) of [responding] employers ... reported offering or planning to offer some student loan debt program ... These 'Student Loan Debt Focused Employers' were more likely than the typical survey respondent (the full sample of all 250 that responded) to have taken steps to measure the financial wellness needs of employees, including examining existing employee benefit data ... surveying employees ... holding focus groups ... and analyzing other quantitative employee data ... Student Loan Debt Focused Employers cited complexity of the programs as their number one challenge in offering financial wellness benefits in the workplace -- nearly half gave this reason." (Employee Benefit Research Institute [EBRI])
Employer-Provided Student Loan Assistance Options Take Several Forms
"The vast student loan debt of Americans who have attended post-secondary educational institutions has received much publicity, prompting lawmakers and employers to seek options to aid those who face such debt. Proposed approaches have included both legislation and options within current employee benefit structures, including retirement plans." (Ascensus)
Student Loans: Some Employers Help Workers Pay Them Down
"Such benefits are relatively new and unusual; only 4 percent of employers surveyed by the Society for Human Resource Management offer it. But its popularity is increasing, because it helps solve a growing concern for workers about their mounting debt. And it helps employers find and retain people when available workers are scarce." (National Public Radio [NPR])
Proposed Legislation Would Promote Student Loan Repayment Retirement Benefits
"[T]he Student Loan Act would open the door for student loan repayments to be treated as elective deferrals under an employer's plan and to qualify for corresponding matching contributions (rather than the special non-elective contributions described in [PLR 201833012]). In addition, the Student Loan Act would clarify nondiscrimination testing requirements for student loan repayment benefits and address how student loan repayment benefits may be provided under not only traditional 401(k) plans, but also under safe harbor 401(k) plans, 403(b) plans and SIMPLE plans." (McDermott Will & Emery)
Three Ways Employers Can Provide Student Loan Support
"Employers can support debt burden employees in three ways: [1] Provide information to employees about services and support available to negotiate or consolidate the debt; [2] Offer debt counseling for student loans through a retained service provider; [3] Provide employees with additional income toward their student loan payments through student loan support programs.... [P]roviding employees with additional income toward their student loan payments is currently taxable as income." (Hill, Chesson & Woody)
Overview of Nondiscrimination Testing for Educational and Adoption Assistance Programs
"This [article] describes the nondiscrimination tests that apply to both educational and adoption assistance programs to help employers understand how each test operates and what data they need to collect to conduct the tests." (Buck)
Student Loan Debt Trends and Employer Programs to Help
"[T]he percentage of families with student loan debt grew from 10.5 percent in 1992 to 22.3 percent in 2016. For families with heads younger than age 35, the percentage with student loan debt approaches one half (45 percent), and the percentage is over a third for those with a family head ages 35 to 44.... [E]mployers looking to attract and retain workers can develop creative programs to address one of the more pressing issues facing workers." (Employee Benefit Research Institute [EBRI])
Designing Employee Benefits to Address Educational Debt
"[A] small percentage of private-sector employers offer student loan repayment assistance for expenses incurred prior to employment, which is taxable and includible in wages under current law.... There has been interest in finding a way to coordinate student loan repayments with employer contributions to defined contribution plans, such as the 401(k) plan, in order to avoid the immediate inclusion of such contributions in income.... Under tax code Section 127, employers can offer employees educational assistance tax-free up to $5,250 per calendar year pursuant to a written program." (Westminster Consulting)
Back to School: Tuition Reimbursement Benefits for Employers
"Tuition reimbursement programs give Human Resources the ability to properly incentivize workers that already know the ins-and-outs of the company/industry and are known to have the skills that aren't necessarily taught as part of an academic education -- things like collaboration, task prioritization, organization, team management, relationship building, creative problem-solving, etc. If you have a known commodity like that, tuition reimbursement can help you develop your promising 'minor league' employees of today into your 'major league' contributors of tomorrow." (Connect Your Care)
Student Loan Debt: Should Employers Focus on Prevention or Cure?
"Preventative solutions are all about helping employees save proactively for education expenses to avoid debt in the future: [1] Payroll deductions into 529 plans ... [2] Education reimbursement programs ... Solutions focused on the cure: [1] Debt consolidation solutions ... [2] Student loan debt repayment assistance." (Voya)
Denial of Tuition Benefits Did Not Breach Fiduciary Duties Under Early Retirement Plan
"The court ruled for the university, finding that the FAQ document clearly disclosed that it was only a summary description of the early retirement incentive plan and directed readers to further information and resources ... The professor had not obtained a copy of the retirement incentive plan ... before signing his early retirement agreement, and the court found his reliance solely on the FAQs unreasonable considering the numerous disclaimers and references to additional resources. The court further held that the university had no fiduciary duty to notify the professor of changes to the FAQs." [Wasserstein v. Univ. of Chicago, No. 17-6567 (N.D. Ill. July 19, 2018)] (Thomson Reuters / EBIA)
A Retirement Perk for Deeply in Debt Millennials
"More than 100 companies put some money toward employees' student loans ... So far, companies have been offering anywhere between $500 and a few thousand dollars a year toward student loan payments. That money is treated as taxable income, a drawback for all parties that may explain why more employers aren't adding the benefit.... Abbott's twist works around the tax penalty, because 401k payments are tax-free." (Bloomberg)
Simple Steps to Provide Successful Student Loan Repayment Benefits
"Student debt management is a complex and delicate issue that has a significant impact on employees' broad financial wellness -- but providing support can be straightforward from the plan sponsor perspective." (PLANSPONSOR)
Did the New Tax Law Accidentally Eliminate Employer-Provided Education Benefits?
"[M]any employer-provided education benefits are directly tied to the employee's right to claim a deduction under Section 162. These include tax-free employer payments and reimbursements for college courses and continuing education, as well as an employer's in-kind provision of such education. If no individual deduction is available for such expenses under Section 162, can the employer still provide, pay for, or reimburse employees for education without it being taxable to the employee?" (Greensfelder)
Estimates of the Financial Effects on Social Security of H.R. 4584, the 'Student Security Act of 2017' (PDF)
"H.R. 4584 specifies that for every $550 (in 2018 dollars) in student loan balance that a person chooses to have forgiven, his or her [earliest eligibility age] and [normal retirement age] would be increased by one month.... [These] estimates [assume] that one-half of eligible student loan amounts would be forgiven with this offer.... [T]he long-range OASDI actuarial deficit would decrease from 2.83 percent of payroll under current law to 2.52 percent of payroll assuming enactment of the Bill." (U.S. Social Security Administration [SSA])
House-Senate Conference Report on Tax Reform Legislation Released
"Under the bill, employers can no longer deduct expenses [for] qualified transportation fringe benefits effective for tax years beginning after December 31, 2017. Qualified bicycle commuting expenses will no longer be tax exempt to employees effective for tax years beginning after December 31, 2017. Other qualified transportation fringe benefits, such as parking and transit passes, will continue to be tax exempt to employees, so that plans that offer salary reductions for such benefits will continue to be allowed." (Employers Council on Flexible Compensation [ECFC])
Employees Favor Student Loan Repayment Benefits
"23% of respondents said they would forgo health care benefits for student loan repayment help; 38% said they would switch out dental care benefits; 46% would give up paid time off (PTO); 33% would sacrifice retirement benefits; and 43% would rather have a student loan repayment benefit than life insurance.... [A] little more than half (53%) of workers revealed they would consider a salary cut, as long as they received a student loan repayment benefit in replacement. If a company were to offer a student loan benefit, 84% of respondents said they would strongly consider that job over others that did not." (planadviser)
Tax Cuts and Jobs Act Passes House
"Dependent Care FSA eliminated as of 2023: The original version of the bill would have eliminated the Dependent Care FSA as of 2018. So this five-year delay is a small victory. Current Senate Bill: Does not eliminate the Dependent Care FSA.... The bill eliminates the ability for employers to provide tax-free adoption assistance to employees (up to $13,570 in 2017). Current Senate Bill: Does not eliminate Adoption Assistance Programs.... The bill eliminates only the Section 127 qualified program that does not require the employee's educational expenses be work-related. Employers would still be able to offer the separate Section 132 working condition fringe tax-free educational benefit for work-related educational expenses. Current Senate Bill: Does not eliminate Qualified Education Assistance Program." (ABD Insurance & Financial Services)
Student Loan Debt Repayment Benefits
"Unlike tuition reimbursement, any dollars provided by employers that offer any level of student loan repayment are considered taxable income. To date, attempts to make this new type of employee benefit tax-advantaged for employees and/or employers have yet to succeed. However, the scale of student loan debt is so vast, more employers are likely to pursue this benefit -- even without the tax advantages." (Frenkel Benefits)
[Official Guidance] IRS Publication 1220: Specifications for Electronic Filing of Forms 1097, 1098, 1099, 3921, 3922, 5498, and W-2G for Tax Year 2017 (PDF)
150 pages, August 2017 revision date. Includes a "First Time Filers Quick Reference Guide" with information about Form 4419, Application for Filing Information Returns Electronically (FIRE), which is used to request authorization to file Forms 1097, 1098 Series, 1099 Series, 3921, 3922, 5498 Series, 8027, 8955-SSA, 1042-S, and W-2G electronically through the Filing Information Returns Electronically (FIRE) System. Excerpt: "Allow a 45-day processing timeframe prior to the earliest information return due date." (Internal Revenue Service [IRS])
Millennials Seek Employer-Sponsored Learning Opportunities
"Sixty-three percent of Millennials surveyed indicated that they look for jobs at learning organizations where they will have access to training, workshops, and company-funded postgraduate schooling ... [A]mong Millennials with less than 2 years of professional experience, the top motivator to take a job is having the opportunity to grow and learn leadership skills. When looking for job opportunities, 55% of survey participants pointed to leadership opportunities as a key consideration." (HR Daily Advisor)
The Emerging Benefit Trend of Student Loan Assistance
"Employers want to be able to help mitigate some of the downside of high student loan debt among their employees, but their efforts are hindered by the fact that employer loan payments on behalf of an employee are currently taxable to the employee. Several pieces of new legislation proposed for the 2017-2018 Congressional term encourage or facilitate employer assistance with student loan repayments through tax incentives. A survey of some of these measures [is included in this article]." (E is for ERISA)
Why Student Loan Repayment May Soon Be a Standard Benefit
"The average tenure of Millennials is around 16 months, and the bulk of these workers are saddled with a tremendous amount of student loan debt ($30,000 on average). That revolving door mentality among younger workers hurts employers' retention rates and costs a fortune in extra recruiting and training costs. Plus, because student loan debt makes contributing to a 401(k) a low priority, employers' 401(k) participation rates suffer as well." (HR Benefits Alert)
Two Big Trends for 2017: Wellness, Education
"[E]mployers this year will focus on employee health and emotional well-being and will use tuition-free college programs for employees to meet company and industry needs. Many will use new technologies to advance these goals." (Society for Human Resource Management [SHRM])
Lawmakers Interested in Student Loan Repayment as Employee Benefit
"The average debt per borrower has nearly doubled since 2004, increasing from roughly $18,000 to more than $35,000 for a 2015 graduate. As millennials become a larger share of the workforce, the student loan debt dilemma is attracting more attention from employers. Legislative proposals would allow employers to establish a variety of tax-preferred student loan repayment assistance programs." (Willis Towers Watson)
Employees Show Interest in Student Loan Repayment Benefit
"87.7% of respondents believe employer-sponsored student loan contribution programs are significant. Furthermore, nearly two-thirds (65.4%) reported difficulty in paying student loan debt, and nearly one-third (32.4%) lack the confidence to complete payments." (planadviser)
Lawmakers Interested in Student Loan Repayment as Employee Benefit
"The average debt per borrower has nearly doubled since 2004, increasing from roughly $18,000 to more than $35,000 for a 2015 graduate. As millennials become a larger share of the workforce, the student loan debt dilemma is attracting more attention from employers. Legislative proposals would allow employers to establish a variety of tax-preferred student loan repayment assistance programs." (Willis Towers Watson)
Student Loan Help Could Be Coming From Your Employer Soon
"The growth of the sector and [the entry of Social Finance (SoFi), a loan refinancing firm,] into the market is just the latest sign that student loan debt is becoming a nearly universal American experience. Firms are increasingly using offers of student loan help ... as a way to compete for top talent. SoFi officials say roughly 600 companies have signed on to use the [Sofi at Work platform], including seven of the top 10 tech firms in the Fortune 500." (MarketWatch)
More Companies Funding Professional Credentials for Employees
"Of the more than 2,200 CFOs the staffing firm polled in the largest U.S. metro areas this year, 38% said their companies fully covered costs employees incurred to maintain professional certifications, and another 38% said they paid part of the costs.... 76% of respondents said they paid all or part of the costs their employees incurred to receive professional certifications." (Journal of Accountancy)
A New Important Benefit Consideration: Student Loan Repayment
"For an employer considering a student loan repayment benefit option, they will need to remember that this is considered taxable income to the employee, unlike the familiar tuition reimbursement, which provides employers a deduction up to $5,250 paid on behalf of the employee. If including employer distribution into a 401(k) plan, employers will also need to remember to amend the plan." (The Institute for HealthCare Consumerism [IHCC])
Why Student Loan Repayment May Soon Be a Standard Employee Benefit
"Because student loan debt is so important to younger employees, companies that offer relief in this area will have a big leg up on the competition and likely be able to bolster dwindling retention rates. What's more, student loan debt isn't only an issue for Millennials. Thirty-five percent of all student loan debt is held by individuals over the age of 39. Many people also have Federal Parent PLUS Loans, loans for parents to help finance their children's college education." (HR Benefits Alert)
The Next 401(k)? Why Student Loan Repayment May Soon Be a Standard Benefit
"The average tenure of Millennials is around 16 months, and the bulk of these workers are saddled with a tremendous amount of student loan debt ... That revolving door mentality among younger workers hurts employers' retention rates and costs a fortune in extra recruiting and training costs. Plus, because student loan debt makes contributing to a 401(k) a low priority, employers' 401(k) participation rates suffer as well." (HR Benefits Alert)
One Employer Sees 129% ROI on Tuition Reimbursement Program for Employees
"[T]here is a measurable financial benefit from tuition assistance. For one company, Cigna, that benefit was at least 129% between 2012 and 2014 -- that is, for each dollar invested, the insurer got that dollar back and saved a further $1.29 on talent management costs. About 60% of employers offer such a program[.]" (CFO)
How to Pay School Loans and Save for Retirement at the Same Time
"CEO Tony Aguilar helped start Student Loan Genius in 2013 ... He's been pushing for Congress to pass a bill that would allow employer matches to student loan payments to be pretax. But in the meantime, his company came up with a way to sync the existing 401(k) program with college loan bills. That way, young people don't lose the opportunity for a tax-deferred match if they've chosen to pay down debt rather than save for retirement." (Bloomberg)
Easing the Student Loan Debt Burden: Points for Employers to Consider
"Although [a recent] survey showed that just 3 percent of employers offer to help employees pay down their student loan debt, a growing number of employers have announced they will be offering this benefit in the future, and more are thinking about providing it.... The most important thing to keep in mind about student loan repayment benefits is that they don't receive preferential tax treatment. In other words, any amount paid to employees will be subject to income and payroll taxes." (Society for Human Resource Management [SHRM])
An Innovative Benefit: Student Loan Repayment Assistance
"Nearly 80% of the student loan holders surveyed ... said they would like to work for a company that offers a loan repayment match, and repayment assistance was valued as much as major parts of the total compensation package -- health care and 401(k) plans.... Forty-three million Americans have borrowed for education, with balances totaling $1.2 trillion[.]" (International Foundation of Employee Benefit Plans [IFEBP])
Educational Assistance Programs: Why They Work
"Respondents overwhelmingly offer educational assistance to their full-time salaried and hourly workers. More than one in three respondents also provide these benefits to their part-time salaried and hourly workers. The most common type of coursework covered is undergraduate-level courses (88%), followed by master's degree-level courses (87%) and associate degree courses (69%)." (International Foundation of Employee Benefit Plans [IFEBP])
PricewaterhouseCoopers Will Give Employees $7,200 for Student Debt
"A recent survey by Iontuition found that 80 percent of 1,000 people surveyed wanted to work for a company that offered student loan repayment assistance. Yet few businesses do this. Many organizations offer tuition assistance, but only about 3 percent have student loan repayment programs, according to a 2015 survey by the Society for Human Resources Management." (Bloomberg)
Coffee Giant Brews Up Perky Educational Benefit for Employees
"In as bold a move as its strongest blend, coffee powerhouse Starbucks [has] upped the ante to its college degree program the company first unveiled last summer. The program now provides a more robust package for employees, offering a full four-year tuition plan for both full- and part-time employees working at least 20 hours, in addition to faster tuition reimbursement. The program is a partnership with Arizona State University and provides full tuition coverage for a bachelor's degree though ASU's online program." (Employee Benefit News)
[Official Guidance] Text of DOL Field Assistance Bulletin 2014-02: Supplemental FAQs on Apprenticeship and Training Plan Expenses -- Skills Competitions
"Q1. On what basis may an apprenticeship and training plan pay for participation in a skills competition or contest? ... Q2. May plan fiduciaries use plan assets to pay for expenses associated with organizing and conducting apprenticeship and training plan skills competitions? ... Q3. What travel expenses are permissible for apprentices and these other individuals? ... Q4. May an apprenticeship or training plan reimburse employers for the wages paid by employers to participants during the competition?" (Employee Benefits Security Administration [EBSA], U.S. Department of Labor [DOL])
New Perk Gives Federal Employees a Break on the Cost of Education
"Federal workers who live outside of Maryland can receive a 25 percent discount on all undergraduate and most graduate programs offered at the University of Maryland University College.... Federal workers' spouses and their legal dependents also are eligible for the reduced rates. The tuition break applies to in-person and online classes." (Government Executive)
[Guidance Overview] 2013 Benefit Limits
"The IRS and the Social Security Administration have announced the cost-of-living adjustments for various benefit plan limits for 2013. Limits affecting retirement plans [as well as] the limits for health and certain other fringe benefit plans are shown [in this article]." (Kilpatrick Townsend)
[Guidance Overview] Year-End Tax Bill Provides Extensions and Expansions of Various Employee Benefits
"Because the $125 monthly exclusion was not changed until 2013, employers had to withhold income tax and FICA taxes on monthly mass-transit and vanpool benefits greater than $125 that were provided during 2012. The retroactive increase in the exclusion for these benefits for 2012 will be reflected on 2012 Form W-2s and affected employees will recover any extra withholding on their 2012 tax returns." (McGuire Woods LLP)
President Signs Fiscal Cliff Bill Including IRA, Retirement Plan and Educational Savings Account Provisions
"Coverdell education savings account (ESA) provisions of the Economic Growth and Tax Relief Reconciliation Act of 2001 (EGTRRA) that were set to expire at the end of 2012 are made permanent. The IRA qualified charitable distribution (QCD) that permits an IRA owner age 70-1/2 or older to contribute up to $100,000 of IRA assets per year tax-free to qualifying charities, has been extended for two years, including 2012 and 2013.... [T]ransition relief ... allows certain distributions taken in January of 2013 to be considered qualifying QCD contributions for 2012, and certain distributions paid directly to IRA owners in December of 2012 to be considered eligible for QCD treatment." (Ascensus)
[Guidance Overview] Highlights of Fiscal Cliff Legislation Affecting Employee Benefits
"Employers providing educational assistance to employees through a qualified education assistance plan may continue to provide those benefits tax-free to participants of up to $5,250 per year. Although this provision had historically been extended period-by-period, the new legislation has permanently extended employer-provided educational assistance for undergraduate and graduate-level courses beginning after December 31, 2012.... The pre-tax allowance for mass transit expenses has been increased from $125 to $240 per year effective retroactively to January 1, 2012 through the end of 2013." (Holland & Hart)
Fiscal Cliff Deal Affects Wide Range of Benefits and Compensation Programs
"While the legislation's most significant provisions include higher tax rates for high-income taxpayers and a payroll tax increase for working Americans, the law also includes important provisions affecting benefit and compensation programs ranging from Roth retirement plans to health care and qualified transportation benefits." (Towers Watson)
Congress Passes Fiscal Cliff Act; Benefits Affected
"Various temporary tax provisions enacted as part of EGTRRA were made permanent. These include: ... The liberalized child and dependent care credit rules (allowing the credit to be calculated based on up to $3,000 of expenses for one dependent or up to $6,000 for more than one) (Sec. 21); ... The exclusion for employer-provided educational assistance (Sec. 127); ... The employer-provided child care credit (Sec. 45F); ... The act also extended through 2013 a number of temporary individual tax provisions, most of which expired at the end of 2011 ... [including] Parity for exclusion from income for employer-provided mass transit and parking benefits (Sec. 132(f))[.]" (Journal of Accountancy)
New Company Benefit? Consider Matching Contributions to a Section 529 College Savings Plan
"Dun & Bradstreet Credibility Corp. ... announced this week a 'multiple match' program for employees who contribute to a 529 college savings plan. The company will match dollar for dollar up to $2,500 per year in total contributions made by salaried employees and up to $1,000 per year for hourly workers, beginning with any contributions made in 2012. (The 529 matching payments are taxable, but the company says it will contribute enough additional money to cover the taxes itself, so that employees wind up with the full dollar-for-dollar value.)" (MarketWatch)
[Official Guidance] Text of IRS Notice 2012-75: Application of the General Welfare Exclusion to Indian Tribal Government Programs That Provide Benefits to Tribal Members (PDF)
"This notice proposes a revenue procedure that would describe general principles for the general welfare exclusion and provide safe harbors under which the Internal Revenue Service would presume that the individual need requirement of the general welfare exclusion is met for benefits provided under Indian tribal governmental programs described in [this] proposed revenue procedure, and would not assert that benefits provided under programs described [herein] represent compensation for services." (Internal Revenue Service)
2013 Expiring and Changing Employee Benefit and Payroll Provisions
"The income tax exclusion for amounts paid by an employer under a qualified adoption assistance program is ... set to expire on December 31, 2012.... Employee contributions to health care flexible spending accounts will be reduced to $2,500 per year for plan years beginning in 2013.... Certain reimbursements for employer-provided educational assistance will expire at the end of 2012." (McDermott Will & Emery)
Employee Education Subsidies: Tax Implications
"Educational reimbursement programs are a common employee benefit among health care organizations. Programs can be established to assist employees in paying for tuition, books and fees in the pursuit of continuing education while on the job. If your organization sponsors such an arrangement, is it getting the best bang for its buck? If structured correctly, these arrangements can provide tax-favored benefits from both an employee and employer perspective." (Holland & Hart)
EBSA Issues Field Assistance Bulletin on Apprenticeship Funds' Graduation and Marketing Expenses
"EBSA stated that with few exceptions, apprenticeship or other training programs are considered employee welfare benefit plans subject to ERISA. The apprenticeship and training program fiduciaries must abide by the general fiduciary standards in Part 4 of ERISA.... [they] must be able to justify plan expenses as appropriate means of carrying out the plan's mission of training workers." (International Foundation of Employee Benefit Plans)
Bill Proposed to Make Employer-Paid Education Assistance Tax Break Permanent
"Under Section 127 of the Internal Revenue Code, employers can reimburse employees for up to $5,250 in annual undergraduate and graduate costs without the reimbursement being included in employees' taxable income. That tax break, though, is set to expire on Dec. 31, 2012." (Business Insurance)
Training and Retirement
"This paper presents results on the effect of formal life-long learning on the decision to retire early. Specifically, I estimate an Option Value model based on individual employer-employee longitudinal data including comprehensive government co-sponsored training records dating back more than 30 years." (Social Science Research Network)
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