401(k)s Have Leeway Investing Pension-Linked Emergency Savings

Retirement plans will have discretion over how they invest newly authorized plan-linked emergency savings accounts created under a sweeping 2022 benefits law, according to new US Labor Department guidance.

DOL’s Employee Benefits Security Administration issued a frequently-asked questions document Wednesday that outlines the eligibility, contributions, administration, and investments permissible under new pension-linked emergency savings accounts, or PLESAs.

Regulators’ hands-off approach on PLESA investments provides a pathway for insurance companies and retirement plan recordkeepers to market new products and capture a larger share of the lucrative 401(k) market.

The SECURE 2.0 Act (Pub. L. No. 117-328) Congress passed in ...