Retirement-plan sponsors and their financial advisers got a new tool from the SECURE 2.0 Act aimed at helping workers save for emergencies, but it comes with some complexity and confusion.
For starters, the name of the “pension-linked emergency savings accounts” — which became available at the beginning of the year to participants contributing up to $2,500 annually on an after-tax Roth basis — reads as a strange choice for vehicles tied to 401(k) and other defined-contribution plans rather than pensions. In guidance released earlier this month, the IRS and the Labor Department used the acronym “PLESAs” for the new accounts, adding an even odder-sounding abbreviation to an industry that hardly needed more of them.
