S. 3333 · On the floor · Taxation

Emergency Savings Enhancement Act of 2025

Sponsor: Todd Young (R-IN)

What it does

• Expand eligibility for pension-linked emergency savings accounts (PLESAs) by removing the exclusion of highly compensated employees, allowing all eligible plan participants to contribute regardless of compensation level.
• Increase the maximum contribution limit for PLESAs from $2,600 to $5,000 per participant, with the limit adjusted annually for inflation.
• Extend and provide additional funding for the Department of Labor program that awards grants to states to promote employee ownership and worker participation in businesses.

Official summary

Emergency Savings Enhancement Act of 2025 This bill expands eligibility and increases the maximum contribution limit for pension-linked emergency savings accounts (PLESAs). As background, PLESAs are savings accounts that are established and maintained in connection with a defined contribution retirement plan, such as a 401(k). Contributions to such accounts are subject to federal income tax, and withdrawals are allowed for any reason. The bill expands eligibility for PLESAs by eliminating the exclusion of highly compensated employees. Thus, under the bill, individuals who meet the age, service, and other eligibility requirements of the plan, regardless of compensation, are eligible to participate in such a plan. The bill also increases the maximum limit on the portion of a PLESA balance attributable to participant contributions to $5,000 (from $2,600 in 2026). This limit continues to be adjusted for inflation. The bill also extends and provides additional funding for a Department of Labor program that awards grants to states to promote employee ownership and participation in businesses.

Latest action

Aug 5, 2026: Placed on Senate Legislative Calendar under General Orders. Calendar No. 544.

Committee: Senate Health, Education, Labor, and Pensions