The IRS has issued preliminary guidance to help employers with the implementation of pension-linked emergency savings accounts (PLESAs), specifically on the anti-abuse rules.
Authorized under the SECURE 2.0 Act of 2022, PLESAs are individual accounts in defined contribution plans that permit and encourage employees to save for financial emergencies.
Employers can offer PLESAs in plan years beginning after Dec. 31, 2023, and in some cases, eligible employees could have begun contributing to a PLESA as early as Jan. 1, 2024.
Employees eligible to participate in an employer’s defined contribution plan and qualify to contribute to a PLESA, if their employer offers one, may contribute to the PLESA even if they don’t participate in the employer’s defined contribution plan.
IRS Notice 2024-22 provides guidance on reasonable measures employers that offer PLESAs can take to discourage potential manipulation of the PLESA matching contribution rules.