SECURE 2.0 emergency savings account provisions and pension-linked emergency savings take full effect

Beginning January 1, 2027, employers offering 401(k) or 403(b) plans may — but are not required to — offer pension-linked emergency savings accounts (PLESAs) that allow non-highly-compensated employees to set aside up to $2,500 in a liquid emergency fund within their employer plan. Contributions are made on a Roth (after-tax) basis and can be withdrawn without penalty. The provision addresses research showing that the primary reason workers prematurely tap retirement accounts is a lack of liquid emergency savings. Employers that auto-enroll employees into PLESAs must cap contributions at $2,500. Workers who withdraw funds are still eligible to contribute to the retirement plan.