An employer may automatically enroll employees in the new retirement plan–linked emergency savings account (PLESA) program, but the employees must be given the chance to opt out, the U.S. Department of Labor (DOL) said last week.
"Automatic enrollment is not the same as mandatory participation," the department said, in a set of frequently asked questions on the new program. "Employees must be given written notification before they are automatically enrolled into a PLESA program, and they have the right under federal law to opt out and withdraw their money at no charge."
The program began this month; it was created under a provision of SECURE 2.0. The emergency savings accounts are treated as designated Roth accounts. Contributions are not tax deductible, but withdrawals generally are considered tax-free. Participants may withdraw funds held in PLESAs at least once a month, as needed.
Complete your profile to continue reading and get FREE access to Treasury & Risk, part of your ALM digital membership.
Your access to unlimited Treasury & Risk content isn’t changing.
Once you are an ALM digital member, you’ll receive:
- Thought leadership on regulatory changes, economic trends, corporate success stories, and tactical solutions for treasurers, CFOs, risk managers, controllers, and other finance professionals
- Informative weekly newsletter featuring news, analysis, real-world case studies, and other critical content
- Educational webcasts, white papers, and ebooks from industry thought leaders
- Critical coverage of the employee benefits and financial advisory markets on our other ALM sites, PropertyCasualty360 and ThinkAdvisor
Already have an account? Sign In Now
*May exclude premium content© 2024 ALM Global, LLC, All Rights Reserved. Request academic re-use from www.copyright.com. All other uses, submit a request to [email protected]. For more information visit Asset & Logo Licensing.
