David McCann of CFO magazine is reporting that IBM has proposed a new type of 401(k) plan designed to reimburse employees’ tuition expenses for higher education. Employees become eligible to participate after five years of service. Participants are then permitted to defer up to $1,000 each year into an interest bearing account. IBM proposes matching deferral contributions up to 50%.
CFO magazine states that IBM is seeking Congressional blessing on this arrangement, which means it may become shoe-horned into Code section 401(k) in the future, or a new Code section will be created to accomodate this arrangement.
[tags]Pension Protection Act, ppa, IBM, tuition, match, 401(k), [/tags]
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