S. 3333 — Emergency Savings Enhancement Act of 2025

This section eliminates the exclusion of highly compensated employees from the definition of eligible participant for pension-linked emergency savings accounts (PLESAs) in individual account plans (e.g., 401(k) plans), such that eligibility is based solely on a participant's satisfaction of the plan's age, service, and other requirements. (As background, PLESAs enable participants to save for emergencies within their retirement plan, with no minimum contributions or balances, penalty-free withdrawals at least monthly, no fees on the first four withdrawals per plan year, and an annual contribution limit equal to the lesser of a specified dollar amount or the plan's elective deferral limit.) It also increases that specified annual contribution limit to $5,000 (from $2,500) and makes conforming amendments to employer matching contribution provisions.

This section expands eligibility for pension-linked emergency savings accounts to highly compensated employees. It increases the maximum account balance to $5,000 (from $2,500). It eliminates one prior condition on account features.

This section amends IRC §402A(e), which governs pension-linked emergency savings accounts (PLESAs) (i.e., Roth-designated accounts within employer-sponsored defined contribution plans for short-term emergency savings), as follows: (1) revises the definition of eligible participant to include any individual meeting the plan's age, service, and other eligibility requirements, without regard to whether the individual is otherwise a participant in the plan; (2) increases the annual contribution limit to $5,000 (from $2,500); and (3) makes conforming amendments to §402A(e)(5)(A) by striking clause (ix).

This section expands eligibility for designated Roth contributions in defined contribution plans to any individual meeting the plan’s age, service, and other requirements, regardless of whether the individual is already a participant. It increases the annual contribution limit to $5,000 (from $2,500) and strikes clause (ix) of section 402A(e)(5)(A).