SECURE 2.0 and Pension-Linked Emergency Savings Accounts: New DOL and IRS Guidance, Fees, Limitations, Reporting

BARBRI

This CLE webinar will provide ERISA counsel, plan sponsors, and employers with an analysis of pension-linked emergency savings accounts (PLESAs) under the SECURE Act 2.0. The panel will discuss new DOL and IRS guidance, PLESA requirements outlined in the SECURE Act 2.0, permissible fees, investment requirements, anti-abuse rules and guidance, and reporting and disclosure requirements. The panel will also discuss compliance challenges and next steps for plan sponsors and employers.

Description

The SECURE Act 2.0 created PLESAs, which is a special retirement plan feature providing a flexible savings opportunity for non-highly compensated employees. The requirements for these accounts under the SECURE Act must be carefully examined by counsel and plan sponsors to determine whether or not to make PLESAs a part of their defined contribution plans.

PLESAs are short-term savings accounts within a defined contribution plan, such as a 401(k) or 403(b) plan. These accounts allow eligible employees to make after-tax contributions up to a specified amount that can be withdrawn at any time at their discretion with early distribution penalties or requirements to be met. This is a significant feature aimed at assisting non-highly compensated employees, subject to certain requirements and limitations under the SECURE Act 2.0.

Recently, the DOL and IRS issued guidance providing clarification on (1.) eligibility and participation; (2.) contributions, withdrawals, and distributions; (3.) investment requirements; (4.) reporting and disclosure requirements; and (5.) application of IRS anti-abuse rules. ERISA attorneys, plan sponsors, and employers must recognize the impact of PLESAs on defined contribution plan design, implementation, and administration and prepare for IRS and DOL interpretations and requirements.

Listen as our panel discusses including PLESAs within defined contribution plans, key provisions and requirements under SECURE 2.0, and best practices for ERISA compliance for plan sponsors and employers.

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