The Educational Assistance Plan of [Company Name] An Employee Communication Presentation

©SHRM Introduction We now accept the fact that learning is a lifelong process of keeping abreast of change. Peter F. Drucker Recognizing the accuracy of this statement by Peter Drucker, acclaimed management consultant and writer, the majority of employers include educational assistance in their employee benefit programs. This assistance is generally provided under Section 127 of the Internal Revenue Code which allows an exclusion of $5,250 per calendar year from an employee’s income for amounts received under an educational assistance program. This sample presentation is intended for presentation to all employees. It is designed to be presented by an individual who has knowledge of the employer’s tuition/educational assistance plan. This is a sample presentation that must be customized to include and match the employer’s own benefit package.

©SHRM Agenda During this meeting, we will review: What an Educational Assistance Plan is and the benefits it provides. Our plan’s policy including:  Purpose  Eligibility  Covered expenses  Service obligation Our plan’s procedures Q & A’s

©SHRM What is an Educational Assistance Plan? An Educational Assistance Plan is an employee benefit program under which an employer pays for or reimburses an employee’s educational expenses. An Educational Assistance program that complies with Section 127 of the Internal Revenue Code provides a significant benefit to employees as it permits the exclusion of up to $5,250 per calendar year from an employee’s income for amounts received for educational assistance.

©SHRM What is an Educational Assistance Plan? (cont’d) To qualify under Section 127, a program must: Have a written plan document. Provide employees with reasonable notification of the availability and provisions of the program. Not discriminate in favor of highly compensated employees. Not provide more than 5% of its total benefits each year to employees who own more than 5% of the company stock. The Educational Assistance Plan of [Company Name] is a qualified plan as it meets all of these conditions.

©SHRM Our Educational Assistance Plan Policy Note to Presenter: The slides for this agenda item are based on a sample Educational Assistance Plan. You will want to customize these for your own Plan. You will also want to distribute a copy of your policy and procedures to attendees at the beginning of this session.

©SHRM Our Educational Assistance Plan Policy (cont’d) 1.Purpose The purpose of the [Company Name] Educational Assistance Plan is to provide non-taxable educational assistance (to the maximum of $5,250 per calendar year) to eligible employees. 2.Eligibility All full-time, regular employees who have completed one year of service.

©SHRM Our Educational Assistance Plan Policy (cont’d) 3.Covered Expenses Tuition, registration fees, required fees such as lab or library fees, and required books for a business-related undergraduate or graduate course in an accredited college or university to the maximum of $5,250 per calendar year for successfully completed courses. (Employees will receive ½ of requested amounts initially and the other ½ upon submission of documentation of completing a course with a passing grade.)

©SHRM Our Educational Assistance Plan Policy (cont’d) 4.Service Obligation An employee who receives advance tuition payments or tuition reimbursement must sign a legally binding agreement that if he/she does not remain employed for at least one year following the completion of the course(s), he/she will be obligated to repay the assistance either through payroll deductions or other legal means.

©SHRM Our Educational Assistance Plan Procedures (cont’d) Procedures 1.Complete the Educational Assistance Request form available from Human Resources. Attach descriptive information regarding the course(s) you wish to take. If you are requesting reimbursement, attach a copy documenting any payment you have made. If you wish payment to be made directly to the school, be sure start this process at least 30 days in advance of the registration and fee deadline. 2.Meet with your immediate supervisor to discuss your request. If your supervisor approves your request, he/she will sign the form where indicated.

©SHRM Our Educational Assistance Plan Procedures (cont’d) Procedures (cont’d) 3.Submit the original, signed form along with documentation to Human Resources. 4.Once approved and received by Human Resources, Accounting will send you a check for ½ of your tuition and fees. 5.Upon completion of the course, submit documentation of successful course completion with a passing grade. The remaining ½ of your requested assistance will be reimbursed to you.

©SHRM Summary Our Educational Assistance Plan is a qualified plan under IRS Code 127. It provides non-taxable educational assistance for employees who take undergraduate and graduate courses up to $5,250 per calendar year. All full-time, regular employees who have completed one year of service are eligible for educational assistance. For full reimbursement of requested expenses, an employee must submit documentation of successfully completing the course with a passing grade and must remain employed for at least one year following completion of the course.

©SHRM Q & A’s Q - Does our plan cover online courses? A – Yes, as long as the online courses are business-related undergraduate or graduate courses given by an accredited college or university. Q - Do the courses have to be related to my current job? A – No, not as long as it is business-related. For example, the plan would cover an accounting course taken by an employee in the sales department but would not cover a course in art history taken by the employee.

©SHRM Q & A’s (cont’d) Q - Does this plan cover courses to obtain a MBA? A – Yes. Approval is on a course-by-course basis and each course must be business-related. Q – Do the repayment requirements apply only if I resign and not if I am involuntarily terminated? A – The repayment requirements apply for a resignation (voluntary termination) and for involuntarily terminations, such as those for poor performance. If our company is forced to have a reduction in force or layoff, we would make a decision at that time on whether to enforce this requirement for any employee who loses his/her job.

©SHRM Questions? Comments?

©SHRM Course Evaluation Please be sure to complete and leave the evaluation sheet you received with your handouts Thank you for your attention and interest !