Does the 401(k) need a PLESA Feature? Exploring the Opportunities & Challenges

TRA [The Retirement Advantage]

The Pension-Link Emergency Savings Account (PLESA) provides participants a tool to accumulate accessible emergency savings amounts within their retirement plan at work. The participant may take distributions from the PLESA account during the year. In addition, the deferrals to the PLESA account can be matched by the plan sponsor. PLESA accounts must be invested in conservative, principal secure investment vehicles. The PLESA is an optional provision and plan sponsors considering this strategy will weigh the benefits to the participants with the increased complexity to the plan.

Learning Objectives

• Understanding which plan sponsors should consider offering a PLESA.
• Familiarity with the eligibility criteria and contribution limits.
• Investment rules are different for PLESA amounts and the student will be aware of these requirements and the impact they have on plan operations.

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