ERIC Advocates for Student Loan & Hardship Withdrawal Policies to Promote Employee Savings

For Immediate Release

Washington, DC – The ERISA Industry Committee (ERIC) started 2019 off with a flurry of comments on retirement policies affecting large plan sponsors.

Yesterday, ERIC submitted comments to the Internal Revenue Service (IRS) on proposed regulations relating to hardship distribution provisions for 401(k) plans. ERIC was generally supportive of the regulations, but urged the IRS to give employers the flexibility to determine whether to suspend a participant’s elective deferrals for up to a six-month period following receipt of a hardship distribution. ERIC believes that the prohibition in the proposed regulation on contribution suspensions is neither required by the relevant legislation, nor does it further the public interest as it will likely increase “leakage” from retirement savings and unreasonably restrict plan sponsor discretion in tailoring 401(k) plans to their specific workforce.

ERIC also called for removing the mandatory requirement in the proposed regulations that participants take distributions of all employee stock ownership plan dividends before receiving a hardship distribution. ERIC believes that this requirement results in a disproportionally large burden placed on plan administrators that far outweighs the often-negligible effect that such a distribution would have on participants’ financial situations.

“ERIC’s members provide comprehensive retirement benefits to tens of millions of active and retired workers and their families across the country. The changes we recommend provide important employer flexibility and will ensure that 401(k) plan participants continue to have an opportunity to access their benefits in the event of a hardship circumstance and save for retirement” said Annette Guarisco Fildes, President and CEO, ERIC.

Separately, on January 10, ERIC submitted comments to the U.S. Treasury proposing to expand the student loan repayment guidance set forth in the IRS Private Letter Ruling-201833012. In its comments, ERIC worked with other business groups and companies, raising questions and asking for guidance focused on:

  • Application to safe harbor plans
  • Coverage of other types of defined contribution plans
  • Impact on nondiscrimination testing and other administrative issues
  • Availability of correction programs
  • Impact on pre-approved plan documents
  • Contributions made to Section 529 funds
  • Employer-funded student loan accounts
  • Application to other types of debt repayment and to other actions

“ERIC strongly believes that expanding student loan repayment guidance will encourage more employers to design retirement savings programs that assist their employees struggling with repaying their student loans,” said Guarisco Fildes.

ERIC previously submitted comments on retirement savings programs for individuals repaying student loans that urged the IRS to broaden the reach of its guidance to enable all sponsors of 401(k) plans to provide retirement savings related to student loan debt repayment.

Click here to read ERIC’s latest comments on student loan repayments.

To read ERIC’s comments on hardship distributions, click here.


All media inquiries to The ERISA Industry Committee should be directed to:

Kelly Broadway, 202.627.1918,

About the ERISA Industry Committee
ERIC is a national advocacy organization that exclusively represents large employers that provide health, retirement, paid leave, and other benefits to their nationwide workforces. With member companies that are leaders in every sector of the economy, ERIC advocates on the federal, state, and local levels for policies that promote flexibility and uniformity in the administration of their employee benefit plans.