Assignment Issue? Forgoing Match By Receiving Student Loan Assistance

I came across a scenario where a company is willing to either provide an employee a matching contribution in the 401k plan, or student loan payoff assistance outside the 401k plan. 

On the surface, I'm struggling to understand how this wouldn't violate the assignment regulations of 401-13. Any thoughts on how this could be acceptable/written in a plan document? I've asked for a document to see how it's written but haven't received it yet. 

Couldn't the document exclude Group A from Employer Match, where Group A is defined as employees receiving other company benefits?  Provided the document can permit an excluded class of employees, and you pass coverage, nothing jumps out that it wouldn't work.

All depends on the document.

1 hour ago, Buffys Redrum said:

Couldn't the document exclude Group A from Employer Match, where Group A is defined as employees receiving other company benefits?  Provided the document can permit an excluded class of employees, and you pass coverage, nothing jumps out that it wouldn't work.

All depends on the document.

Thank you for the response. I'm not asking about the document per se. I can think of a few ways to write it as far as excluding groups. I'm asking in regards to ERISA. The employee must choose between receiving a match within the plan vs. receiving a loan repayment to his/her student loans outside of the plan. An election must be made within the plan based on factors outside the plan.

Cen't be done.  Somebody else can provide the cite.

Probably violates the "contingent benefit rule". This rule prohibits employers from requiring employees to participate in a 401(k) plan in order to qualify for other benefits.

Reg. Sec. 1.401(k)-1(e)(6)

That would be my first guess, too.  ERISA parrot will check whether elective deferrals are a condition of getting the loan assistance.  It may be that participation in elective deferrals is not required, but receiving loan assistance will nix getting the match on whatever the elective deferrals are.

Another thing to consider is that a choice of loan assistance appears to be an election against a match.  So reframe the question to ask if it is permissible directly or indirectly to elect a taxable benefit in lieu of a matching contribution.

Sounds right.

Seems like you are allowing them to elect to take the match as a taxable benefit (student loan repayment) which would make the match part of your CODA as well--likely creating 402(g) and other problems..

The student loan repayment would be taxable to the employee, right? So this would violate the anti-non-401(k) "cash or deferred" election rules. See 1.401(k)-1(a)(2) and (3).