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Human Resources

Section 127 Education Assistance Plan

For Tuition Benefits granted to BYU Employees

The purpose of this Educational Assistance Plan (the “Plan”) is to provide educational assistance to Eligible Employees of Brigham Young University on a tax-free or tax-reduced basis(“BYU”). Section 127 of the Internal Revenue Code of 1986, as amended (the “Code”), provides, in general, that gross income of an employee does not include the first $5,250 of amounts paid or expenses incurred by his or her employer during a calendar year, for educational assistance furnished to the employee pursuant to a qualified written educational assistance plan. This Plan, including its components, the applicable provisions of University Employee Tuition Benefit Policy and University Employee Benefit Tuition Procedures, is BYU’s educational assistance plan.

This Plan is a separate from and does not include or affect any qualified scholarship or tuition reduction benefits described in the University Employee Tuition Policy and Procedures It is intended to qualify under Code Section 117 (applicable to tuition reductions for education below the graduate level for any BYU employee—including retired or disabled employees—or the employee’s spouse or dependent), or any working condition fringe benefit under Code Section 132.

Definitions

For purposes of this Plan, the following terms have the meaning given below:

  • Education
    “Education” means any form of instruction or training that improves or develops the capabilities of an individual, but does not include education or training in sports, games, or hobbies unless required as part of a degree program or directly related to the employee’s work responsibilities for the Employer. “Education” is not limited to courses that are job-related or part of a degree program.
  • Educational Assistance
    “Educational Assistance” means the payment by BYU of tuition incurred by or on behalf of an Eligible Employee for the Education of the Eligible Employee, as permitted in the University Employee Tuition Benefit Policy and University Employee Tuition Benefit Procedures. (This includes, generally, tuition charges and reductions for graduate study at BYU but does not include payments for fees and similar payments, books, supplies, or equipment. ). However, “Educational Assistance” does not include payment for, or the provision of, either (a) tools or supplies that may be retained by the Eligible Employee after completion of a course of instruction; or (b) meals, lodging, or transportation.
  • Eligible Employee
    “Eligible Employee” includes, for any calendar year, any employee who is currently employed by BYU and is eligible during that year for the tuition benefit under the University Employee Tuition Benefit Policy.

Educational Assistance Benefits

The benefits provided under the Plan consist solely of the Educational Assistance described in the University Employee Tuition Benefit Policy for classes of Eligible Employees described in such policy. This Plan shall not allow any Eligible Employee a choice between educational assistance and other remuneration. Except as specifically provided in this Plan document, the Plan does not limit or expand the level of education and training benefits available to an Eligible Employee under the University Employee Tuition Benefit Policy that applies to the Eligible Employee.

Eligibility

This Plan is intended to benefit BYU employees in general and shall not be administered in a way that discriminates in favor of officers or highly compensated employees of BYU. This Plan will not be considered discriminatory merely because any Educational Assistance that is available under the Plan to a non-discriminatory class of Eligible Employees is utilized to a greater degree by officers or highly compensated employees included in that class. Otherwise, the classification of Eligible Employees for tuition benefit must comply with the non-discrimination standards of Code Section 410(b)(1)(B), without regard to the exceptions in Code Section 401(a)(5).

An Eligible Employee seeking Educational Assistance under this Plan must comply with all applicable rules and procedures, including but not limited to eligibility rules and approval and reimbursement procedures, as set forth in the applicable University Employee Tuition Benefit Policy and University Tuition Benefit Procedures or other applicable BYU policies and procedures.

Notification of Eligible Employees

The Employer shall provide Eligible Employees with reasonable notice of the terms and availability of the Plan applicable to such Eligible Employees on the BYU Human Resources and the University Policy web sites. All Eligible Employees shall be entitled upon written request to a paper copy of this Plan document.

Tax Consequences

1. To the extent that any Eligible Employee receives any Educational Assistance from BYU under this Plan that exceeds $5,250 in a calendar year, such excess benefits shall be subject to federal income tax and payroll tax withholding in accordance with federal and state law.

2. An Eligible Employee shall be responsible for any income tax liability arising from his or her receipt of Educational Assistance benefits under this Plan, whether or not BYU withheld tax on those benefits.

Miscellaneous

BYU may amend or terminate the Plan at any time. This Plan shall not be deemed to give any Participant or Employee the right to be retained in the employment of BYU or to interfere with the right of BYU to discharge any Eligible Employee at any time, regardless of any effect that such discharge shall have upon him or her as a participant of this Plan. This Plan shall be construed and enforced according to the laws of the State of Utah, to the extent not preempted by any federal law.